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Part-time job costs soar for retailers

Part-time job costs soar for retailers
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The cost of employing people into entry-level jobs leapt by over 10 per cent on Sunday (April 6) for retailers across the country, and by a massive 13 per cent for those working part-time.

This is a result of the double whammy of costs hitting the industry with today’s rise in National Insurance Contributions (NICs) coupled with last week’s increase to the National Living Wage.


Higher National Living Wage and changes to employer NICs will together cost the retail industry over £5 billion a year, rising to £7bn when the new packaging tax (Extended Producer Responsibility) comes into force in October 2025.

The changes to the NIC threshold, which fell from £9,100 to £5,000, means many more part-time and entry level jobs will now be captured by the tax, reducing the incentive for many businesses to offer them.

This comes as the Government implements its new welfare reforms aimed at “helping people who can work to do so” (Liz Kendall, Work and Pensions Secretary).

Part-time jobs play an important role in supporting people back into work, allowing people to work the hours they feel able to do. Unfortunately, such roles would now cost businesses 13.5 per cent more (based on 15 hours per week), as changes to employer NIC’s disproportionately affect flexible and entry-level roles.

According to the most recent ONS data, there were 1.5 million part-time jobs in retail in 2024, the lowest on record, and down 200,000 since 2018.

A recent analysis by the British Retail Consortium suggested that a further 160,000 part-time retail roles – more than 1 in 10 – were at risk of being lost in the next three years.

Helen Dickinson, Chief Executive of the British Retail Consortium, said, "The Chancellor’s October Budget is now hitting retailers with an extra £5bn on their employment bill. When coupled with the new packaging tax in October, retailers’ costs will have spiralled by £7bn in a single year.

"Given slim retail margins of just 2-4 per cent, these additional costs mean higher prices, fewer jobs and fewer stores. A recent survey of retail finance directors showed that half were planning to reduce hours and workers as a direct result of the employer NIC hike.

“It will be part-time jobs which take the biggest hit. While the cost of employing someone in a full-time entry-level position rose by over 10 per cent, for a part-time worker it is over 13 per cent.

"Part-time retail jobs hit their lowest level since records began in 1996, and have fallen by 200,000 in the last seven years. This matters: a local, flexible retail job is a vital stepping stone for many people, whether it’s a first job out of school or a part-time role for someone returning to the workforce or with caring responsibilities.

"While the Government’s welfare reforms aim to increase the numbers in work, this week’s cost increases will kick away the ladder for many who are just getting their first foothold.

“Retailers have spent the last five months preparing for the consequences of these new costs on their businesses. While there will be an impact on employment, the Government must consider how its future policies can mitigate this, making it easier for businesses to employ people.

"This includes ensuring the Employment Rights Bill improves workers’ rights without hampering job creation at this crucial time.”