Rachel Reeves' New National Insurance Policy Hits Working Women Hard
- Rachel Reeves lowered the Employers' NIC threshold, increasing costs for businesses.
- Experts predict this policy may lead to a reduction in part-time job opportunities, predominantly affecting women.
- The budget changes may worsen economic security for women in low-paying roles.
On Wednesday, October 29, 2024, Rachel Reeves announced a budget that included significant changes to the Employers' National Insurance Contributions (NICs). The threshold for employers' NICs has been slashed from £9,100 to £5,000, with an increase in the contribution rate from 13.8% to 15%. Experts warn that this move could adversely affect many part-time workers, significantly impacting women, who make up the majority in this employment category. The new budget aims to raise £23.7 billion for the government by 2025/26 but may also result in fewer part-time positions being created as employers feel the financial pinch. Current statistics show that 38% of women in employment are part-time workers, reflecting a substantial reliance on such jobs. Experts believe that businesses may reduce their workforce or limit the hours of part-time positions in response to higher NIC costs. Furthermore, commentators express that the women most impacted by this policy may face difficulties in securing flexible work that accommodates their responsibilities. Concerns have been raised regarding single-parent families, predominantly led by women, who could be significantly worse off due to these budget changes. While the government claims this budget protects low earners through a rise in the National Living Wage, evidence suggests that many women employed in lower-paying, part-time roles may face tougher job markets as a result of the NIC adjustments.