# Higher employer NICs & National Living Wage increase will ‘severely impact’ charity shops

- Link: https://fundraising.co.uk/2024/12/03/higher-employer-nics-national-living-wage-increase-will-severely-impact-charity-shops/
- Published: 2024-12-03T10:51:04+00:00
- Author: Melanie May

**Charity retailers expect to be significantly impacted by the increase to employer
NICs combined with a rise in the National Living Wage, according to the Charity 
Retail Association.**

Reducing paid staff and hours, closing shops and putting up prices were all likely
outcomes, its survey of 52 charity retailers found with only 8% expecting to take
no action.

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Asked about the likely impact, respondents said that they expect to:

 * Reduce paid staff (36% of respondents)
 * Reduce paid hours (35%)
 * Reduce trading hours (21%)
 * Close shops (27%)
 * Scale back plans to open new shops (38%)
 * Put up prices (67%)
 * No action (8%)

Charity Retail Association Chief Executive Robin Osterley said:

> “We are of course aware that the Government is facing some extremely difficult
> choices, but it seems a shame that raising money by impacting charities, and specifically
> charity shops, should be part of their thinking. Our survey shows that charity
> shops, which form such a hugely important part of the circular economy and which
> provide an invaluable source of inexpensive goods for hard-pressed households,
> will be severely impacted by these changes, and we are calling on the Government
> to take steps to mitigate this.
>  
> “The national insurance increase will cost a typical charity shop around £1,000
> each year – some of this cost will be recouped through higher prices but ultimately
> the result will be less money raised to support charitable services.”

Employer NICs are set to rise in April from 13.7% to 15% – a change that will cost
the sector an estimated £1.4bn. Also in April, the National Living Wage will increase.
For over 21s, it will rise by 6.7%, from £11.44 to £12.21, while for 18 to 20-year-
olds, the minimum wage will rise from £8.60 to £10. 

The Chancellor Rachel Reeves [recently ruled out exempting or reimbursing charities](https://fundraising.co.uk/2024/11/28/employer-nics-rise-chancellor-rules-out-exemption-or-reimbursement-for-charities/)
impacted by the upcoming increases to NICs. This followed a letter sent by the NCVO
and ACEVO, and co-signed by over 7,300 charities and voluntary organisations, that
set out the impact and urged Reeves to commit to reimbursing voluntary organisations’
increased employer NICs, as for the public sector.