Howden Employee Benefits

UK Global Compliance Updates

To ensure compliance and transparency, we're committed to keeping you up-to-date on regulatory changes in the UK.

Our aim is to empower you with the information you need to navigate complex regulatory landscapes confidently. By summarising key updates and providing insights, we strive to support your business's compliance efforts and promote sustainable practices.

Here we have summarised the key updates and changes in the UK for you, along with our insights on each piece.

June 2025

United Kingdom – Changes to Statutory Sick Pay

As of April 2025, Statutory Sick Pay increased from £116.75 to £118.75. Employers are required to pay Statutory Sick Pay to eligible employees for up to 28 weeks.

Read more: Statutory Sick Pay (SSP) Overview

For more information, contact your local broker in the United Kingdom.

Disclaimer: These compliance updates are for informational purposes only and do not constitute legal advice. For guidance on legislative or regulatory changes in each country, please consult a legal professional. We accept no liability or responsibility arising from any reliance placed on these materials by any visitor to the page, or by any third party who may be informed of any of its contents.

March 2025

United Kingdom – Neonatal Care Leave and Pay

Effective 6 April 2025, parents will have a day-one right to neonatal care leave and pay. It will apply to parents of babies who are admitted into neonatal care up to 28 days old and who have a continuous stay in hospital of 7 full days or longer. Eligible parents will be able to take up to 12 weeks of leave, on top of any additional leaves they are entitled to. Statutory Neonatal Care Pay will be available to parents who meet the eligibility criteria.

For more information, contact your local broker in United Kingdom.

December 2024

United Kingdom - Changes to National Insurance Contributions

In the October budget, changes to the National Insurance Contributions made by employers were announced. From 6 April 2025, Employers’ National Insurance Contributions will increase from 13.8% to 15%. This is likely to influence employer spending priorities.

Read more: National Insurance Contribution update

Howden's view: We believe this increase also presents a valuable opportunity for businesses to ensure tax efficiency through salary exchange (or salary sacrifice) options. While SMEs face higher Employer National Insurance (NIC) contributions and increased tax bills, they can address both these challenges and address the UK’s retirement shortfall.

By implementing Salary Sacrifice, employers can save 15% on Employer NICs on employees’ pension contributions, helping offset some additional costs whilst making a positive contribution to their employee’s retirement outcomes. With upcoming changes to auto-enrolment contribution thresholds, and the removal of the lower limit, now is the perfect time to review both pension contributions and broader remuneration strategies.

If you require further information on the benefits of Salary Sacrifice, we have produced a guide for employers here.
When changes are made, like implementation of Salary Sacrifice and death benefits funded from accrued pension funds being included for IHT purposes, effective communication is crucial to help employees understand the implications for them. Clear communication can enhance employee trust and engagement, particularly in periods of change.

For more information, contact your local broker in the UK.

April 2024

United Kingdom - Childcare support changes

As of April 2024, the UK is expanding childcare support for working families. The increases in support will continue to occur until September 2025.

•   In April 2024, 15 hours of childcare are available to eligible working parents of 2-year olds.
•   In September 2024, 15 hours of childcare available to eligible working parents of 9 months -2 year olds.
•   In September 2025, 30 hours of childcare per week are available to eligible working parents of 9 months – school aged children.

References: Upcoming changes to childcare support | Childcare choices

For more information, contact your local broker in the UK

United Kingdom - National insurance contribution reductions

As of April 6 2024, national insurance contributions in the UK for Class 1 will reduce by 2 percent so it now reflects 8% of their pay rather than 10% previously and 12% prior to that. This reduction will help to pay for the increased cost of living.

Howden partner’s view: Regarding National Insurance, this change means that an average worker on £35,400 will receive a tax cut of over £450. Having more take home pay could of course help people with cost-of-living challenges or prompt some to increase their pension contributions.

However, tax thresholds being frozen until 2028, will mean more individuals fall into the higher rate tax bracket as inflationary pay increases take their pay above the upper threshold.

The reduction in NIC would make a notable difference to many employees, particularly in Scotland, potentially improving their financial stability and enabling greater flexibility in budgeting and saving.

References: Reduction to the main rates of primary Class 1 and Class 4 National Insurance contributions - GOV.UK (www.gov.uk) ; Spring Budget 2024: Reaction From Howden Employee Benefits & Wellbeing (howdengroup.com)

For more information, contact your local broker in the UK

United Kingdom - Menopause leave

In February 2024, new guidance was provided by the Equality and Human Rights Commission (EHRC) regarding menopause leave in the workplace. This guidance highlights that symptoms of menopause may be considered a disability under the Equality Act 2010 and employers are under a legal obligation to make reasonable adjustments and avoid employee discrimination.

References: Regulator provides advice for employers on menopause and the Equality Act | EHRC (equalityhumanrights.com) ; Supporting women’s health in the workplace: from periods to menopause and everything in between - Page 16 (publitas.com) ; Supporting International Women's Day: Howden calls on employers to prioritise women's health and wellbeing ahead of new legislation (howdengroup.com)

Howden partner’s view: This is a great step forwards and recognises the debilitating symptoms that can affect women during menopause. Businesses should familiarise themselves with the guidance and ensure that they have relevant policies and support (for example access to Occupational Health) in place to ensure that they are meeting this.

For more information, contact your local broker in the UK

United Kingdom - Pension policy changes and new lump sum limits

As of April 6 2024, the UK has abolished the Lifetime Allowance (LTA) which was introduced to limit the amount of tax relief that a person can benefit from in their lifetime. Pension contributions above this limit were subject to taxes. The objective of removing this limit will encourage individuals over 50 to return to work and incentivise further earnings without a pension tax limit.

With the removal of the LTA, two new limits are being introduced to control tax relief on lump sums including the Lump Sum Allowance and the Lump Sum and Death Benefit Allowance (LSDBA).

Lump Sum Allowance: Adding a limit of £268,275 (25% of the LTA), on the tax-free element of lump sums at retirement.
Lump Sum and Death Benefit Allowance (LSDBA): Adding a limit of £1,073,100 on the total amount of the tax-free part of lump sums and lump sum death benefits payable to an individual.

*It is important to note that this amount will be reduced by the payment of certain other benefits, such as the payment of a pension commencement lump sum (“Lump Sum Allowance”), together with any other registered lump sum payments.

References: Abolition of the Lifetime Allowance (LTA) - GOV.UK (www.gov.uk) ; Spring Budget 2024: Reaction From Howden Employee Benefits & Wellbeing (howdengroup.com)

Howden partner’s view: The abolition of the Lifetime Allowance from April has been confirmed. However, whilst the lifetime allowance is abolished, new allowances such as the lump sum allowance and the death benefit allowance have been introduced, each limiting the tax-free benefits that can be paid.

There are discussions around the 'Pot for Life' proposals, which aims to provide savers with flexibility by allowing them to maintain a single pension pot throughout their lifetime, are very much ongoing.

For more information, contact your local broker in the UK

United Kingdom - Employment Law updates

1.   As of April 2024, the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 will be implemented and expands laws to protect pregnant employees or those on, or returning from, maternity/adoption/shared parental leave facing redundancy.

Currently, employees on maternity/adoption/shared parental leave have enhanced protections in redundancy situations, including the right to be offered a suitable alternative vacancy over other employees at risk, if one is available.

The Act expands this protection to include pregnant employees, from the moment they notify their employer of their pregnancy, through to 18 months after childbirth.

2.   As of April 2024, the Carer’s Leave Act 2023 will be implemented and will grant a new entitlement of one week of unpaid leave annually for employees who care for dependants with long term needs. This right to leave will be available to all employees from day one of employment. “Long term needs” is defined as:

•   Anyone with a condition that meets the definition of disability under the Equality Act 2010;
•   Illness or injury (physical or mental) that requires or is likely to require care for more than three months, or;
•   Old age

Howden partner’s view: Both of these changes are great steps forward. In relation to the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 businesses need to ensure that they are acting within the new rules and seek employment law advice if clarification is needed. They should familiarise themselves with the Carer’s Leave Act 2023 legislation and ensure that their leave policies reflect this.

For more information, contact your local broker in the UK

June 2023

United Kingdom - Early age pension - Occupational pensions

The Finance Act 2022 increased the minimum early pension age under occupational pension schemes from 55 to 57 with effect from 6 April 2028 (certain exceptions would apply for those with an unqualified right to retire before this age and members of uniformed public service pension schemes).

Pension dashboard

The Pensions Dashboards Regulations 2022 were approved by the parliament and came into force from 12 December 2022. The system, managed by the Pension Dashboard Programme (PDP), will provide people with the information on all their pension savings and entitlements: state, workplace and individual pensions in one place.

All FCA-regulated pension providers will need to connect to the system by the end of August 2023, with some exceptions (where the deadline was pushed back to October 2024). The proposed FCA standards would allow pension providers to offer additional services within the dashboard, such as pension advice, modelling and calculators. The consultations should be closed in the winter ahead of the final approval in government.

The Annual Allowance and Tapered Annual Allowance

From 6 April, the annual allowance will increase from £40,000 to £60,000 which is the maximum annual allowance. However, it is tapered for individuals with an adjusted income of over £120,000, and a threshold income of over £200,000. One pound of every £2 earned above an adjusted income of £260,000 will be lost, tapering down to a maximum contribution of £10,000 if adjusted earnings exceed £360,000.
The tables below simplifies and summarises the current tapered allowance compared to the previous rules.

Adjusted Income Tax year 2023/24

Up to £260,000 £60,000

Between £260,000 & £360,000 Between £60,000 & £10,000

Over £360,000 £10,000

Adjusted Income Tax year 2022/24; 2021/22; 2020/21

Up to £240,000 £40,000

Between £240,000 & £312,000 Between £40,000 & £4,000

Over £312,000 Between £40,000 & £4,000

The Lifetime Allowance (LTA)

The UK Government has announced that the Lifetime Allowance will completely be abolished from 2024/25. However, from 2023–2024, the maximum amount of tax-free cash that may be withdrawn will be limited to £268,275 (25% of £1,073,100), unless a person has prior protections in place that permit a larger tax free cash allowance.

For more information, contact your local broker in the United Kingdom.

If you have an questions about our compliance updates, speak to our team.

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About Howden Employee Benefits

Howden Employee Benefits are award–winning employee benefit consultants. We work with consumers, SMEs and corporate employers to advise, design and create the right employee benefits package to suit your needs. We're specialists in: protection benefits, healthcare benefits, workplace wellbeing, international and ex-pat benefits, online benefit administration & communication.

Email: GBM@howdengroup.com

Address: One Creechurch Place, London, UK EC3A 5AF

www.howdengroup.com

Howden Employee Benefits is part of the Howden Insurance Group. Registered in England and Wales under company registration number 2248238 with its registered office at One Creechurch Place, London, EC3A 5AF. Authorised and regulated by the Financial Conduct Authority.