Retailers Brace for £5bn Employment Burden in Latest Budget

Retail Workers Face a Pricey Shift: Entry-Level Jobs Surge in Cost by 10%+

The retail scene is feeling the squeeze, with employers suddenly paying over 10% more for entry‑level positions and a whopping 13% hike for part‑time workers. This double whammy stems from two new tax moves: a jump in National Insurance Contributions (NICs) and the rise of the National Living Wage.

What’s Driving the Numbers?

NIC threshold drop – from £9,100 to £5,000 – means a whole new swath of part‑time and junior roles now fall under the tax net. Coupled with the increased living wage, the retail industry is looking at an extra £5 bn a year in costs, escalating to £7 bn when the packaging tax kicks in Oct 2025.

Why Part‑Time Jobs Are the Bitterest Pill

Part‑time roles, especially those around 15 hours a week, are hit hardest with a 13.5% rise.
Flexibility has always been the ticket for people returning to work or juggling caring duties.
Now, the price tag could send many of these stepping‑stone jobs out the door.

The Numbers Speak For Themselves

According to ONS, there were 1.5 million part‑time retail jobs in 2024— the lowest on record and down by 200,000 since 2018. A British Retail Consortium analysis hints that another 160,000 part‑time positions might vanish within three years.

Voices from the Frontline

Helen Dickinson, CEO of the British Retail Consortium, warns:

“The Chancellor’s October Budget is pushing retailers an extra £5 bn onto their employment book. Add the packaging tax, and costs spike to £7 bn in just one year. Retail margins of 2‑4% mean this equates to higher prices, job losses, and fewer stores. A recent survey shows many finance directors plan to cut hours or staff in response to the NIC hike.”

She highlights that part‑time roles are usually the “vital stepping stone”— whether it’s the first job post‑school or a flexible gig for someone juggling family duty. The new costs could pull the ladder away from these hopeful workers.

What Should the Government Do?

“Retailers have been bracing for impact for the last five months,” Dickinson adds. She calls for the Employment Rights Bill to bolster worker rights without stifling job creation, especially during this delicate phase.