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October 2021 Budget – Notes for Employers

Budget 2021

Monday, November 8, 2021

On Wednesday 27th October the chancellor Rishi Sunak briefed the House of Commons on the Governments budget plans. Here below we take a look at the key headlines for employers.

National Living Wage (NLW)

The National Living Wage will increase from the current £8.91 to £9.50 per hour. This increase will apply for all workers aged 23+ from April 2022.

National Minimum Wage (NMW) rates will also increase from April 2022 – with the Apprentice Rate seeing the largest rise with an 11.9% increase over the current hourly rate. [see breakdown below].


April ’22 Current Increase
National Living Wage £9.50 £8.91 6.6%
21-22 Year Old Rate £9.18 £8.36 9.8%
18-20 Year Old Rate £6.83 £6.56 4.1%
16-17 Year Old Rate £4.81 £4.62 4.1%
Apprentice Rate £4.81 £4.30 11.9%
Accommodation Offset £8.70 £8.36 4.1%

Commissioners’ advice to the Government this year covers several areas. The LPC has reviewed minimum wage rules for domestic workers and recommended that an exemption that has prevented au pairs and domestic workers from earning the minimum wage is removed. Commissioners have also examined the evidence around the NLW’s impacts on different regions of the UK and on groups of workers with protected characteristics.

Additional investment of £170 million in 2024-25 to increase the hourly rate to be paid to early years providers to deliver the government’s free childcare hours.

The Pay Freeze Ends – A Public Sector Pay Freeze was introduced a year ago, November 2020, and the Chancellor announced that it was to end. No specific details were outlined on where that would leave the public sector and the 1.5 million employees affected by the freeze.

Universal Credit (UC) taper reduces from 63p to 55p a reduction of 8%.  But what does this mean for the average recipient of UC?  The move is one that Rishi Sunak was swift to clarify as a reward for low-income workers (1.9 million households in the UK fall into that category). With the removal of the £20 Pandemic related UC uplift payment last month and it’s a welcome move but it will only help those earning.  The reduction in the taper provides greater retention of income for monies earned above the wage threshold.

Learning & Development

Adult skills funding up by 29% compared to 2019-20 – this funding will go towards a range of policies in England such as continuing the Lifetime Skills Guarantee to offer free Level 3 courses for adults, and quadruple the current scale of Skills Bootcamps.

£560m of new funding through the UK Shared Prosperity Fund for the new UK-wide Multiply programme which will support up to half a million adults to improve their numeracy.

£1.6bn for 16–19-year olds’ education in England. This will maintain funding in the face of demographic growth and provide additional hours for learners who take T Levels.

Increase in apprenticeship funding in England to £2.7bn in 2024-25

£90 million to extend the Job Entry Targeted Support Scheme to the end of September 2022 – helping those unemployed for between three and twelve months across Great Britain find work.

Scale-Up visa

A new Scale-up Visa is to be launched Spring 2022.  The aim of this visa is to help the UK’s fastest-growing businesses to access overseas talent.

To qualify applicants must pass the language proficiency requirement and have a high-skilled job offer from an eligible business with a salary of at least £33,000. This will then entitle them to a fast-track visa.

The Global Talent Visa aims to draw in experienced and skilled workers in STEM industries. Holders of international prizes, scholarships will automatically qualify for a visa.

50% business rates discount for businesses in the retail, hospitality, and leisure sectors in England.

Tax relief for theatres, museums, orchestras, and galleries from now up to 31 March 2024.

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