Autumn Budget 2025: What Employers Need to Know About Staffing, Costs and Workforce Planning

The Chancellor’s Autumn Budget delivered a packed set of changes that will shape how businesses hire, plan and support their people over the next few years. From adjustments to salary sacrifice pensions to increases in the National Living Wage and reforms to business rates, the picture is a mix of extra financial pressure and a few welcome boosts for employers looking to grow.

Below, we break down the key measures and what they may mean for employers across office support, commercial, finance, HR, IT and business operations.

Salary Sacrifice Pension Changes: Higher Costs for Employers and Employees

One of the most significant announcements is the introduction of a £2,000 cap on tax-free pension salary sacrifice contributions. From April 2029, both employees and employers will pay National Insurance on contributions above this threshold.

For employers, this means increased NI bills and the likelihood that staff may adjust how they save. Some organisations are already considering reducing benefits or reshaping reward packages to offset the additional cost. From a workforce perspective, this could influence retention, particularly in competitive markets where benefits matter as much as pay.

National Living Wage Increases: Higher Wage Bills, Sharper Focus on Hiring

From April 2026, the National Living Wage for over-21s will rise to £12.71 per hour, alongside notable increases for younger workers and apprentices. While this supports lower-paid employees during a difficult cost-of-living environment, it also places added pressure on employers already navigating tight budgets.

Some business groups have expressed concern that higher wage thresholds may impact entry-level hiring. With early talent essential for long-term workforce development, employers may need to review structures, progression pathways, and training investment to maintain a healthy pipeline.

Income Tax & NI Threshold Freeze: Slow, Steady Pressure on Payroll Costs

The government has chosen to freeze income tax and employer National Insurance thresholds until 2031. As salaries gradually increase over time, more employees will cross into higher tax bands. For employers, this adds subtle but persistent pressures to total employment costs, with employees potentially feeling the squeeze on take-home pay.

Apprenticeship Support: A Positive Step for Attracting Young Talent

There was some welcome news for employers hiring early-career candidates. Apprenticeship training for under-25s will now be fully funded for SMEs, removing a financial barrier that has previously held some businesses back.

The government also announced additional support through the youth guarantee programme, designed to help young people transition into work. While these measures may help boost early-career talent pipelines, many industry voices believe further reform is needed to revive apprenticeship uptake at scale.

Business Rates: Relief for High Street Employers

Retail, hospitality and leisure businesses will benefit from new, permanent lower business rates. Transitional support will also help smaller businesses manage increases following the 2026 revaluation. These adjustments may offer a lifeline to organisations balancing operational costs with staffing needs.

At the same time, larger commercial properties and warehouse-based operations will see higher rate contributions, which could influence business planning for 2026 and beyond.

What This Means for Employers

The overriding message of the budget is clear: employers will need to plan carefully. Rising wage levels, added employment taxes and shifts in benefit structures will all influence how organisations manage costs and attract talent.

At the same time, there are opportunities, particularly for businesses looking to invest in apprenticeships, early careers and high street growth. The next year will be an important period for reviewing workforce strategy, evaluating reward packages and strengthening the support structures that improve retention and engagement.

How Huntress Can Support You

In a changing landscape, having the right people strategy is more important than ever. Whether you’re reviewing hiring plans, navigating workforce costs or simply need high-quality talent to support growth, our teams are here to help.