Those of us in the third sector will be reflecting on the implications of the 2024 UK Autumn Budget announced yesterday by Chancellor Rachel Reeves. Although we welcome changes that will benefit low-income workers, an increase in overheard costs and taxes will have an outsize effect on our sector, where there is already a struggle to meet demand and find sustainable funding sources.
Here’s an overview of relevant changes to the UK budget and the support we can offer third sector organisations. It’s critical we understand the sector’s reactions to this announcement and the support you will need, so please share your thoughts with us via this five-minute survey by 30th November:
Key changes
The UK Government has announced an increase to employers’ national insurance contributions, a rise in the national living wage and other changes that will have significant implications for the work of third sector organisations across the UK.
“The National Living Wage (NLW) will increase by 6.7% to £12.21 per hour from April 2025. This represents an increase of £1,400 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 3 million low paid workers across the UK.” (UK GOV)
“The 6.7% rise in the national living wage and the increase in employer National Insurance contributions (NICs) [from 13.8%] to 15%, both effective from 1 April 2025, will bring significant financial pressures for charities. Additionally, the NIC threshold has dropped from £9,100 to £5,000.” (NCVO)
Other key announcements from the budget include changes to support for individuals and carers:
- Reduce Universal Credit debt deductions (from 25% to 15%)
- Raise the weekly earnings limit on Carer’s Allowance
- Conduct an independent review of Carer’s Allowance overpayments
The £3.4 billion increase in funding for Scotland is an encouraging step. We will have to wait and see how Scottish Government sets its budget in December to fully understand what opportunities and shortfalls will exist for our sector in the coming financial year.
How we can support
TSI (Perth & Kinross) can provide support, knowledge and advocacy to third sector organisations. As we face this challenging and uncertain period, our team will work to identify the most relevant support for you. Our Development Officers are available to meet for one-on-one conversations to offer guidance and referrals to other key contacts.
One resource that may be of use is the UK Government’s Employment Allowance programme: If you’re a business or charity, and your employers’ Class 1 National Insurance liabilities were less than £100,000 in the previous tax year, you will be eligible to reduce your annual National Insurance liability by up to £5,000.
Please be in touch with us at info@thirdsector.pk.org.uk if you would like to connect with a Development Officer working in your thematic area.
We also work alongside local and national stakeholders, such as Perth & Kinross Council, to advocate for change at the strategic level that is conducive to the health of the third sector. Please ensure you complete our UK budget survey so we can pursue these discussions with your experiences in mind.