Ahead of next week’s Spring Budget, our experts ask what impact the new NLW will have


’In the 2016 Autumn Statement the chancellor announced that the National Living Wage would increase by 30p to £7.50ph: a 4% rise. The tax and National Insurance

advantages of salary sacrifice schemes will be removed by 5 April 2017, except for pensions, childcare, cycle-to-work and ultra-low-emission cars. We are waiting for the draft legislation, but in practice we may see a reduction in ‘flex’ plans, at least in their current form, as employers seek to maximise value for employees within a tighter budget, instead returning to a more traditional fixed package of salary and

benefits. This would mean less choice for employees and a loss of the ability to

flex their package.’ Caroline Harwood, director, incentives, Burges Salmon LLP

’The NLW has been a catalyst for many firms to rethink their benefits approach. There’s been widespread media coverage of companies cutting staff benefits to pay for the higher wage bill, leaving many people no better off. Similarly, salary

sacrifice reductions may also see the balance shift from benefits to pay in some sectors. However, the response can’t just be to cut investment in people. For every organisation, people – their skills, ideas, and their motivation – are our source of advantage, and our response to the future. We need to be working to boost productivity, and to ensure fair and competitive reward strategies attract and retain

the people we need.’ Peter Cheese, chief executive, CIPD

‘This won’t necessarily change the benefits world irrevocably. UK Plc is extremely agile at adapting to change. Negotiations will be under way and employers will be seeking greater value from their benefit spend since it may now have to go further. Group risk providers and advisers will be working to help employers continue to offer great value for money within their flex programmes – not just in terms of the actual benefits but also through the extra supportive services that come with group risk policies (e.g. employee assistance programmes, HR and legal advice, absence management etc). Making efficient use of these services is key to optimising budget and achieving best value.’ Katharine Moxham, spokesperson, Group Risk Development