UK Employee Benefits Compliance Update Q1 & Q2 2025

Howden released a UK employee benefits compliance update covering legislative changes impacting neonatal care and leave, contributions to national insurance, childcare support, menopause leave, pensions, and employment law. Highlights are provided below, and the complete report is available here. Most of these changes go into effect in April 2025.

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.

Changes to National Insurance contributions – From 6 April 2025, Employers’ National Insurance contributions will increase from 13.8% to 15%. This is likely to influence employer spending priorities.

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.

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.

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.

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 incentivize further earnings without a pension tax limit.

Employment law updates – 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.

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).

 

If you need support with your employee benefits in the UK, please contact Asinta, and we will put you in touch with the local experts at Howden.