CIPD consultation response: Low Pay Commission 2025 consultation

In our response to the Low Pay Commission’s annual consultation, we highlight the impact that the increase in the national minimum and living wage (NLW) in April 2025 had on employers, and what sectors have been affected the most. 

Our response discusses how the increase in Employer National Insurance costs has impacted workplaces alongside other costs of doing business, such as the price paid for energy or raw materials. 

We highlight what impact the NLW rise has had on employers based in different parts of the UK, what level the NLW should be set at from April 2026, and where employers get their information about the NLW. 

Our response also focuses on the impact that the increase in the apprenticeship and youth rates has had on employers. 

Key points in our response include the following:

• 22% of employers report that the April 2025 rise in the National Minimum Wage and the National Living Wage increased their wage costs significantly.
• The most common response to this rise was to increase prices (37%), followed by improving productivity (28%), and accepting higher overheads (26%).
• The most frequent way of improving productivity was by giving staff more to do (29%), and by improving general business practices (27%).
• April’s rise in national insurance costs was reported as having the biggest financial impact on the organisation by 36% of employers, followed by 15% saying the increase in energy prices had the largest financial repercussions for the workplace.

Finally, we cover the overall economic outlook of the country over the last year.