CYP Now - DfE moves to allay early years funding fears over national insurance changes

The government is “committed” to financially supporting early years providers to navigate an increase in national insurance contributions for employers, the Education Secretary has said.

Nurseries face an eight per cent real terms funding cut, according to the IFS. Picture: Adobe Stock

Providers have raised concerns over an increase in national insurance contributions and employee wages - Adobe Stock

Chancellor of the Exchequer Rachel Reeves announced in her autumn Budget on 30 October that employer contributions to national insurance would increase from 13.8% to 15% from 6 April next year.

She added that the per-employee threshold at which employers start to pay national insurance will be reduced from £9,100 per year to £5,000 per year.

However, the Budget states that “to support small businesses with these changes, the government is increasing the employment allowance from £5,000 to £10,500 and removing the £100,000 threshold, expanding this to all eligible employers. This means that 865,000 employers will pay no NICs (National Insurance contributions) next year.”

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