As electrical businesses digest the recent budget changes, NICEIC is urging employers to take a long-term view and continue investing in skills development and young talent.
Debbie Shields | Communications Manager
The UK government’s autumn 2024 budget introduced a raft of measures affecting businesses, but two have particularly grabbed the headlines: changes to employers’ National Insurance Contributions (NICs) and increases in the living and minimum wages.
“As electrical businesses of all shapes and sizes consider the potential effect of these changes on their finances and resource planning, we are urging employers to take a long term view and continue to invest in skills development, including apprenticeships,” says Richard Orton, CEO at Certsure. “Closing the skills gap and helping young talent access the sector are crucial if the industry is to continue to thrive.”
The rise in employers’ NICs has been one of the budget’s biggest talking points. From April 2025, the government will increase the rate of employer NICs from 13.8% to 15% and reduce the per-employee threshold at which employers become liable to pay NI (the secondary threshold) from £9,100 to £5,000.
These changes are undoubtedly significant, but many employers may not be aware that they do not have to pay NICs for apprentices if the apprentice is under 25 years old, on an approved UK government apprenticeship standard and earns less than £967 a week (£50,270 a year). “This has not changed in the latest budget,” explains Richard. “So, if you have existing or new apprentices that meet these criteria, you will continue to pay no NICs for them.”
Alongside this, and to help offset the effect of the rises on smaller businesses, the government is increasing the Employment Allowance. This currently gives a discount of £5,000 to employers with NICs bills of £100,000 or less. From April 2025, this will increase to £10,500. The £100,000 eligibility cap will also be removed, making the allowance available to all businesses.
In her budget speech, Chancellor Rachel Reeves said the increase in the Employment Allowance means that 865,000 employers will not pay any NICs next year and over one million will pay the same or less than they did previously. She added that this “will allow a small business to employ the equivalent of four full time workers on the National Living Wage without paying any National Insurance on their wages”.
Reeves also announced rises in the national minimum and living wages. From April 2025, the National Living Wage for employees aged 21 and over will go up from £11.44 to £12.21 per hour. The National Minimum Wage for those aged 18-20 will go up from £8.60 to £10.00 per hour and for those aged 16-17 and apprentices from £6.40 to £7.55.
“At NICEIC, we acknowledge that these rises, both in employers’ NICs and in the living and minimum wages, may have a cost impact on many businesses,” says Richard. “But we also believe that it’s imperative this doesn’t deter the investment in people and skills necessary to meet the wider challenges facing the industry.”
And it’s not just about the bigger picture for the sector; apprentices make an invaluable contribution to the individual firms they work for. “When your firm decides to take on an apprentice, you’re not just getting their talent, enthusiasm and commitment,” he explains. “You’ll also be able to reap the benefit of new skills and capabilities. Alongside developing traditional competencies to strengthen your core business, they’ll be helping you to upskill and tap into new markets.”
As an example, the latest apprenticeship standards include work with key new low carbon technologies such as solar PV, electric vehicle charging points and battery storage. All new apprentices also learn up-to-date digital and communication skills, as well as developing their commercial, customer service and problem-solving capabilities.
Why do apprenticeships matter?
Qualifying as an electrician requires hands-on, practical experience, so apprenticeship schemes provide a vital route into the industry, and a stepping-stone for further career development. “We in the electrical sector have a long history of being at the forefront of delivering high quality apprenticeships,” says Richard, “and electrotechnical apprenticeships are still some of the most popular in construction and the built environment.”
“As the sector faces a growing skills gap, the need to nurture new talent has never been greater,” he emphasises. Statistics from ECA show there is a national shortage of qualified electricians, and part of the challenge is that although people are enrolling in classroom-only courses, they aren’t then able to move on to apprenticeships.
The ECA has found that 12 months after finishing their classroom-only courses, only 10% of potential electricians are securing an apprenticeship. The remaining 90% can struggle to enter the workforce and establish themselves in the electrical industry, which may lead some to leaving the sector altogether. This imbalance highlights the urgent need for more apprenticeship places to meet the growing demand.
“To tackle this imbalance,” says Richard, “businesses need to take a long term view of skills development and continue to support entry to the industry through apprenticeships. At NICEIC, we recognise the pressures all businesses are under, and the potential concerns raised by the budget announcements. But investing in people, the sector’s greatest asset, remains at the heart of creating a future-proof, prosperous industry.”
Learn more about apprenticeships in the electrical sector: www.the-esp.org.uk/apprenticeships
Read the government’s guidance on employing apprentices: www.gov.uk/employing-an-apprentice
Check out ECA’s “Electrical Skills Index”, which analyses how many people in England are starting classroom-based courses compared to apprenticeships: www.eca.co.uk/taking-action/skills-for-the-future
Find out how minimum wage rates are applied: www.gov.uk/national-minimum-wage-rates
Learn more about the changes to employers’ NICs: www.gov.uk/government/publications/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl
“As electrical businesses of all shapes and sizes consider the potential effect of these changes on their finances and resource planning, we are urging employers to take a long term view and continue to invest in skills development, including apprenticeships,” says Richard Orton, CEO at Certsure. “Closing the skills gap and helping young talent access the sector are crucial if the industry is to continue to thrive.”
The rise in employers’ NICs has been one of the budget’s biggest talking points. From April 2025, the government will increase the rate of employer NICs from 13.8% to 15% and reduce the per-employee threshold at which employers become liable to pay NI (the secondary threshold) from £9,100 to £5,000.
These changes are undoubtedly significant, but many employers may not be aware that they do not have to pay NICs for apprentices if the apprentice is under 25 years old, on an approved UK government apprenticeship standard and earns less than £967 a week (£50,270 a year). “This has not changed in the latest budget,” explains Richard. “So, if you have existing or new apprentices that meet these criteria, you will continue to pay no NICs for them.”
Alongside this, and to help offset the effect of the rises on smaller businesses, the government is increasing the Employment Allowance. This currently gives a discount of £5,000 to employers with NICs bills of £100,000 or less. From April 2025, this will increase to £10,500. The £100,000 eligibility cap will also be removed, making the allowance available to all businesses.
In her budget speech, Chancellor Rachel Reeves said the increase in the Employment Allowance means that 865,000 employers will not pay any NICs next year and over one million will pay the same or less than they did previously. She added that this “will allow a small business to employ the equivalent of four full time workers on the National Living Wage without paying any National Insurance on their wages”.
Reeves also announced rises in the national minimum and living wages. From April 2025, the National Living Wage for employees aged 21 and over will go up from £11.44 to £12.21 per hour. The National Minimum Wage for those aged 18-20 will go up from £8.60 to £10.00 per hour and for those aged 16-17 and apprentices from £6.40 to £7.55.
“At NICEIC, we acknowledge that these rises, both in employers’ NICs and in the living and minimum wages, may have a cost impact on many businesses,” says Richard. “But we also believe that it’s imperative this doesn’t deter the investment in people and skills necessary to meet the wider challenges facing the industry.”
And it’s not just about the bigger picture for the sector; apprentices make an invaluable contribution to the individual firms they work for. “When your firm decides to take on an apprentice, you’re not just getting their talent, enthusiasm and commitment,” he explains. “You’ll also be able to reap the benefit of new skills and capabilities. Alongside developing traditional competencies to strengthen your core business, they’ll be helping you to upskill and tap into new markets.”
As an example, the latest apprenticeship standards include work with key new low carbon technologies such as solar PV, electric vehicle charging points and battery storage. All new apprentices also learn up-to-date digital and communication skills, as well as developing their commercial, customer service and problem-solving capabilities.
Why do apprenticeships matter?
Qualifying as an electrician requires hands-on, practical experience, so apprenticeship schemes provide a vital route into the industry, and a stepping-stone for further career development. “We in the electrical sector have a long history of being at the forefront of delivering high quality apprenticeships,” says Richard, “and electrotechnical apprenticeships are still some of the most popular in construction and the built environment.”
“As the sector faces a growing skills gap, the need to nurture new talent has never been greater,” he emphasises. Statistics from ECA show there is a national shortage of qualified electricians, and part of the challenge is that although people are enrolling in classroom-only courses, they aren’t then able to move on to apprenticeships.
The ECA has found that 12 months after finishing their classroom-only courses, only 10% of potential electricians are securing an apprenticeship. The remaining 90% can struggle to enter the workforce and establish themselves in the electrical industry, which may lead some to leaving the sector altogether. This imbalance highlights the urgent need for more apprenticeship places to meet the growing demand.
“To tackle this imbalance,” says Richard, “businesses need to take a long term view of skills development and continue to support entry to the industry through apprenticeships. At NICEIC, we recognise the pressures all businesses are under, and the potential concerns raised by the budget announcements. But investing in people, the sector’s greatest asset, remains at the heart of creating a future-proof, prosperous industry.”
Learn more about apprenticeships in the electrical sector: www.the-esp.org.uk/apprenticeships
Read the government’s guidance on employing apprentices: www.gov.uk/employing-an-apprentice
Check out ECA’s “Electrical Skills Index”, which analyses how many people in England are starting classroom-based courses compared to apprenticeships: www.eca.co.uk/taking-action/skills-for-the-future
Find out how minimum wage rates are applied: www.gov.uk/national-minimum-wage-rates
Learn more about the changes to employers’ NICs: www.gov.uk/government/publications/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl
