Should employers pay only half the usual National Insurance on staff aged 21 to 24?
Employers currently pay 15% Class 1 National Insurance on earnings above £5,000 per year for staff aged 21 and over who are not qualifying apprentices. Under-21s and apprentices under 25 pay zero employer NI up to £50,270. The rate was raised from 13.8% and the threshold lowered from £9,100 in April 2025. Today the Conservatives have pledged to halve the rate to 7.5% for 21-24 year olds to address rising youth unemployment now at 16.4%.
5 Opinions
Yes, but we need to go further. We have to make it easier for this cohort to find employment or training, and easier for companies to hire them. My worry is that the tax and overhead costs on small businesses are now so high that they've become completely prohibitive.
Its no where near enough. If I’m hiring someone, and the choice is 3yrs experience doing the role, or taking on a graduate without that, the grad needs to be significantly cheaper, otherwise its not worth the risk. With all the new employee day 1 rights, the costs of taking a chance are much higher now. The £1500 saving pitched here would likely not cover the staff training for the grad, so I cant see how this would change behaviour in a meaningful way.
It should encourage employers to gamble on young recruits
I like this idea. The figures don't identify the NI rise as a major cause (estimated 7,000 lost vacancies for this age group), but they do identify the rise in the minimum wage as a factor. So this is a two-for-one fix.
No guaranteed job gains, no cuts. That should be policy across the board. Vastly increase the number of modern and graduate apprenticeships and focused matriculation to university for the academically gifted and inclined, I've been looking for an apprenticeship for some time as an older work returner and can't find them anywhere really, yet they say they're out there. Will probably study a conversion masters instead but then the burden falls on me as always in the UK.