23 November 2023

The Autumn 2023 statement wasn’t quite the ‘Workplace Pensions Revolution’ the press alluded to, but it did announce some changes that affect employers and employees.


Let’s take a closer look at the areas in question:

  • The main 12% rate of employee national insurance contributions will be cut by two percentage points to 10%, which will be brought in effective from 6 January 2024.
  • National Living Wage will increase by more than a pound an hour from April 2024 to £11.44. It will also be extended to 21-year-olds. For anyone under 21, the minimum wage is lower - but this is also increasing, as is the lowest legal pay for apprentices.
    Those aged 18 to 20 will get at least £8.60 an hour from April, which is an increase of £1.11. For those 16 and 17, and apprentices, the minimum pay will be £6.40 - a rise of £1.12 on last year.
  • The triple lock state pension increase will be 8.5%, raising the state pension to £221.20 per week.
  • Consultation to reform workplace pensions, with the aim of allowing workers to set up a ‘pot for life’ with a pension fund of their choice. 
  • No change to the proposed removal of the pension’s lifetime allowance in April 2024.
  • The chancellor has announced a £320m plan to drive innovation and unlock the first tranche from his Mansion House reforms by 2030.
  • Additional free 15 hours childcare for eligible children aged between 9 months and 3 years to be rolled out in September 2024.


Verlingue’s View

Although yesterday saw some welcome news for employees, there were some missed opportunities - such as, tax incentives for private medical care to relieve pressure on the NHS; some potential additional costs for employers relating to National Living Wage increases; and the knock-on effect to higher pension contribution costs.   

The proposed changes to workplace pensions and ‘pots for life’ are unlikely to see the light of day in the near future, due to the complexity of introducing such an arrangement and additional burden on payroll and finance functions. However, it may accelerate the move to pensions dashboards for individuals, where multiple pension plans can be viewed in one place.

One area that has not been addressed is the frustratingly complex approach to personal tax, which can see individual tax of over 70% in some cases (due to the high-income child benefit tax charge for those earning over £50,000, and/or the tapering removal of the personal allowance for those earning over £100,000).  This can be addressed by utilising salary sacrifice to reduce gross earnings.


What actions should your business take?

In relation to the increase in National Living Wage:

  • Calculate the additional cost of pension contributions and National Insurance Contributions (NIC), and build this into your payroll budget.
  • Re-assess your payroll to ensure new National Living Wage (NLW) rates are not breached via new or existing salary sacrifice arrangements for pension contributions or other benefits.
  • Recalculate employee NIC savings via salary sacrifice from 6 January 2024 – especially if you utilise a benefits platform and show employees their total reward statement including tax and NIC savings.


  • For excepted group life schemes set up to cover employees with fixed or enhanced pension protections, wait for legislation to be passed into law before considering a move back to a registered scheme.
  • Communicate or re-communicate the upcoming changes to free childcare provision in September 2024.
  • Communicate any existing salary exchange opportunities to employees and, if there is not one in place, consider introducing one for pension contributions and other benefits.


Here at Verlingue we specialise in employee benefit & consulting and advisory services. If you have any questions or would like to discuss the changes in more detail, please get in touch with your consultant or contact Rob Marshall.

Rob Marshall, Sales Director – Employee Benefits
T: +44 (0) 7704 547478
E: rob.marshall@verlingue.co.uk