As per normal practice, April brings about changes to statutory payments that employers need to be aware of. These will take effect from 6 April 2025. These updates include increases to national minimum wage rates, family related leave pay, sick pay, National Insurance contributions, redundancy rates, and tribunal award limits. The following information provides a detailed breakdown of these changes to ensure employers are prepared for the upcoming financial year.
National Minimum Wage (NMW) Rates (Per Hour)
| Category | New Rate | Increase (£) | Increase (%) |
|---|---|---|---|
| National Living Wage (21 and over) | £12.21 | £0.77 | 6.7% |
| 18-20 Year Old Rate | £10.00 | £1.40 | 16.3% |
| 16-17 Year Old Rate | £7.55 | £1.15 | 18.0% |
| Apprentice Rate | £7.55 | £1.15 | 18.0% |
| Accommodation Offset | £10.66 | £0.67 | 6.7% |
For those employers that commit to pay the London Living Wage, the new rate of £13.85 was announced in October 2024. If you haven’t already implemented this rate, it should be effective on payroll from 1 April 2025. The next increase announcement is due October 2025.
Statutory Parental Payments
Maternity, Adoption, Paternity, Shared Parental Pay, and Parental Bereavement Pay will all increase to £187.18 per week.
Statutory Sick Pay
Will increase to £118.75 per week, reflecting a 1.71% rise.
National Insurance
Employer’s National Insurance contributions will rise from 13.8% to 15% (an increase of 1.2%). The threshold for employer NI contributions will decrease from £9,100 to £5,000 per year.
Statutory Redundancy Rates
The cap on a week’s pay for calculating statutory redundancy payments will increase to £719, with a maximum statutory redundancy pay of £21,570.
Tribunal Award Limits and Vento Bands
The maximum basic award of unfair dismissal increases to £21,570.
The maximum compensatory award for unfair dismissal will increase to £118,223 or one year’s gross pay, whichever is lower.
The Vento bands guide compensation for injury to feelings in discrimination cases. The updated bands are as follows:
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Lower band: £1,200 to £12,100 for less serious cases.
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Middle band: £12,100 to £36,400 for cases that do not merit an award in the upper band.
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Upper band: £36,400 to £60,700 for the most serious cases.
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Exceptional cases: Awards may exceed £60,700.
As a reminder, from 20 January 2025, Employment Tribunals can increase awards by up to 25% if employers fail to comply with the statutory Code of Practice on dismissal and re-engagement. Protective awards, previously capped at 90 days’ pay per affected employee, can now be increased to 112.5 days’ pay.
Author: Amy Roeks
