The British Retail Consortium (BRC) has written to Chancellor John Healey, calling on him to raise the employer National Insurance Contributions (NICs) threshold to “boost job creation” at the Autumn Budget. The letter calls on him to raise the threshold from £5,000 to £6,000, noting that this would support job creation, particularly for entry-level roles.
The 2024 Budget change to the National Insurance contributions (NICs) threshold, which came into effect in April 2025, cost retailers £1.74 billion. Combined with the increase in the headline employer NICs rate and two above-inflation annual rises in the National Living Wage, retailers’ employment costs have spiralled by £6.5 billion in just two years.
The effects of the threshold reduction are particularly acute in retail because of the industry’s large number of flexible and part-time roles. 55% of job roles are part-time, meaning many workers were brought into the employer NICs threshold for the first time. In the last two years, the cost of employing a full-time entry-level worker increased by 15%, while for part-time roles it rose by 19%.
The impact is clear to see: the number of retail jobs has plummeted by 115,000 in just two years. This matters. Almost one in four people get their first job in retail, making the industry an essential route into work for young people and those with limited experience or qualifications. As the largest private sector employer, the industry and its supply chain provide essential employment opportunities everywhere, from the smallest village to the largest city.
The letter to the Chancellor also calls for measures to increase investment around the UK, and make the current taxation system fairer. This includes calls to address the rising taxes and levies on retailers’ energy bills, cancel the annual inflationary increase to business rates, and remove all shops from the high-value multiplier introduced in the 2025 Budget.
Helen Dickinson, Chief Executive of the British Retail Consortium, said:
“Retail has always been one of the great gateways into work, giving millions of people their first job and the skills and confidence to build a career. Previous changes to NICs hit retail disproportionately hard and soaring employment costs are making it harder for retailers to offer the crucial entry-level roles that so many young people rely on.
“The Chancellor can turn the tide on unemployment and tackle the NEETs crisis that is robbing a generation of young people of opportunity. Raising the NICs threshold to £6,000 would boost retail job creation and ease the inflationary pressures bearing down on the industry and its customers.”
