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Time is ticking:

Care organisations across the UK are facing a make-or-break situation: a hike in National Insurance Contribution rates with a lowered threshold and an increase in National Minimum Wage.

 

Are you prepared for 6 April 2025?

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Act now to ensure your care organisation is fully prepared

Helping you make crucial savings without sacrificing your services or delivery

The imminent National Insurance Contributions (NICs) set out by the Autumn Budget in October 2024 is expected to have a devastating impact on the already struggling social care sector in the UK. In the face of yet another significant rise in employer costs, many social care providers – who are already operating on razor-thin margins – may be facing a tipping point.

 

UK employers will be forced to bear a new higher rate of Employer Insurance Contributions (EICs) and start paying for more part-time staff with the reduced threshold. For many care providers, this could mean some very difficult decisions— either cutting services or reducing staff to keep costs manageable. Both options would result in poorer care for the vulnerable people they support, a terrible result for the sector.

 

The NICs uplift will hit social care providers at a time when the care industry has been floundering for an overextended period already: staffing shortages, low wages, and high turnover rates. As costs continue to rise, care providers may struggle to recruit and retain workers, further compounding the sector’s crisis. According to the latest report from Care England and HFT, A third of social care providers have considered leaving the market for the third year running. 90% of providers cited rising workforce costs as one of their top three cost-pressures, with 95% reporting that increases in the National Living Wage are their deepest concern.

 

This is could truly be the final straw for many in the sector.   Care organisations need to take immediate action in order to survive, this will involve taking bold decisions and calculated risks towards making savings and maximising their tight finances.

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In case you weren’t aware of the exact proposed changes, here are the details in full:

Starting from April 6, 2025, there will be several significant changes to National Insurance Contributions (NICs) in the UK:

  • Rate Increase: The secondary Class 1 NICs rate will increase from 13.8% to 15%
  • Secondary Threshold Reduction: The earnings threshold at which employers start paying secondary Class 1 NICs will be reduced from £9,100 to £5,000 per year – this will mean many more employees in your existing and future workforce will now require contributions from you.
  • Employment Allowance Increase: The maximum Employment Allowance, which reduces employers’ NICs liability, will increase from £5,000 to £10,500.

Although there will be a removal of the eligibility cap (employers with a secondary Class 1 NICs liability of £100,000+ can now claim the increased allowance) which means all eligible businesses and charities can claim the allowance (now up to £10,500), this will not fully negate the impact of the other NIC changes unfortunately. You will need to take further actions if you wish to maintain current finances.

90% of providers cited rising workforce costs as one of their top three cost-pressures, with 95% reporting that increases in the National Living Wage are their deepest concern.

marrgo is the solution

For many care organisations, it is not possible for them to raise income without catastrophic consequences. Optimising and reducing costs across your current spend areas is the most feasible method of mitigating these impending costs.  marrgo allows you to make effective savings without jeopardising service offerings or quality of care.

marrgo is the easy-to-use buying website from Marr Procurement.  marrgo is a trusted source of handpicked suppliers, consistently offering great prices and service, all stored on a dedicated online portal.

marrgo users enjoy an intuitive system without the frustrations of using multiple external websites to order products or compare prices and specifications.  marrgo removes the headache of ensuring staff are purchasing the right products in the correct manner by housing all appropriate and necessary items within one place.

For client decision-makers and analysts, they are re-assured by marrgo through data-driven insights into spending trends, spending profiles of their users, control over product range and total transparency of spending habits. Ultimately, marrgo gives managers total control of their costs and valuable data for forecasting and strategic budgeting.

 

How marrgo can help:

We work with some of the UK’s largest care providers, who are looking for improved control and visibility over their purchasing, through to smaller providers who are seeking a simple solution to buying products on a low volume ad hoc basis.

We’re here to help you

It’s not too late to make immediate changes which will dramatically improve your financial stability.  We have proven expertise to ensure your care organisation can continue providing the best care for your users.


About Marr Procurement

Marr Procurement is the UK’s leading health and care sector procurement specialist. Since 2015 Marr Procurement has delivered material savings to the bottom line of our clients. Our highly talented team of procurement professionals will help you achieve structured and sustained savings across all areas of your organisation’s P&L.

Having delivered over 60 procurement projects for many established care providers, we have developed a proven track-record of making effective savings for clients which has been reflected in our client testimonials and clients returning for savings in other spend areas. Our experienced team will work with your organisation’s leadership and operational staff to ensure alignment with all of our activities throughout the programme journey, and critically, to ensure continuity and quality of care is prioritised.

Our mission is to ensure our clients can provide more of their best work. Whether that be embedding robust procurement strategies, driving project implementation, delivering tech innovation or implementing an all-encompassing buying portal, we provide bespoke analysis and consultation to allow our clients to focus on their core goals.

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