Workforce in jeopardy from NIC and wage rises
INDEPENDENT retailers have warned of job losses and reduced hours for staff due to rising minimum wage and National Insurance Contributions (NICs), says the Federation of Independent Retailers (the Fed).
According to a survey conducted by the Fed, which represents around 9,000 independent retailers across the UK and Ireland, some 52% of respondents said they would be cutting back their workforce to cope with rising business costs.
A further 67% said they would cut back on staff hours and a whopping 80% of members said they will now be forced to work more hours themselves.
The survey results come as the 6.7% rise to national minimum wage is set to increase on 1 April, taking this number to £12.21 per hour for those aged 21 and over. NICs will increase from 6 April to 15%, while the threshold – the point at which employers begin to pay national insurance on an individual’s salary – will be reduced from £9,100 to £5,000.
These rising costs are also set to have an impact on consumers as well, with 41% of respondents stating they would raise prices of products across stores to combat the increasing costs. Some 42% said they could not do so due to the number of price-marked products that are already stocked across the store.
Meanwhile, many plans to invest back into businesses have been put on the back-burner for the majority of retailers, as only 21% said they plan to invest or refit their businesses.
Mo Razzaq, national president at the Fed, said: “Small independent retailers are the backbone of their communities, providing employment and creating jobs.
“As responsible employers we want to ensure we are paying a fair wage to our staff. But a bigger than expected rise to the national living wage to £12.21 an hour from April 2025 is a step too far for hard-pressed small businesses.
“As well as paying out staff more in wages, we must pay more in national insurance and pension costs, at a time when many of our other costs, including energy, are rising.
“There is no easy way for small retailers to combat these increases. As our survey shows, the only solution available to independent shop owners is to reduce staff hours and staff numbers and, somehow, take on even more hours ourselves.”
