One of the biggest announcements to come from last year’s Summer Budget was the introduction of National Living Wage for UK workers aged 25 and over.
The changes came into effect in April 2016, raising hourly wages from £6.70 to £7.20 on 1 April, and is expected to rise steadily to £9 by April 2020.
New research conducted by an influential think tank has now shed light on how UK companies have coped following the introduction of the new National Living Wage earlier this year.
The survey, which was carried out by the Resolution Foundation, found that the majority of employers have favoured raising prices over cutting the number of staff on their books.
These findings appear to dampen fears that the changes would lead to an increase in redundancies.
The Office for Budget Responsibility (OBR) had previously suggested that the new rules could lead to as many as 60,000 job losses by the turn of the decade.
While the latest survey, which involved 500 companies across a range of sectors, may suggest that these fears won’t be borne out, there has nonetheless been a squeeze on many employers’ budgets.
Around three in ten of the firms who took part in the survey said they had reduced profits to cope with the new requirements. A small number of companies also admitted making changes to staff terms and conditions, with eight per cent having cut perks such as paid breaks or overtime pay.
If you need help planning for the increased costs incurred from the National Living Wage, contact us today. Our specialist team can help ensure your business stays in the strongest possible financial position.