As an employer, you will be well-aware of the increases in the National Minimum Wage (NMW) and employer National Insurance Contributions (NIC) for the 2025/26 tax year. Based on a salary of £33,000, the increase in NIC alone is an additional £901 per annum, placing additional pressure on the finances of businesses throughout the UK.

Since the NIC changes were announced in the Autumn Budget last October companies have been looking for ways to save money, considering options such as:

• Cancelling pay reviews.
• Slowing or stopping new employee recruitment.
• Changing the contribution structure of their workplace pension scheme.
• Introducing salary exchange/sacrifice to create employer and employee NIC savings.
• Financial education for staff to help them manage the effects of the cost-of-living increases on their finances.

However, employee finances are also being squeezed in what has been dubbed as “awful April”, with increases in utilities such as council tax, energy and water bills. So, how can employers make changes to their provision to maximise efficiencies without reducing the benefits for their employees in these challenging times?

A pension scheme review can benefit both employers and employees in a variety of ways, including valuable cost savings, better charges and features.

Recently, a new client asked our corporate pensions team at Integrity365 to undertake a review of their Workplace Pension scheme, where we were able to find a new scheme that reduced the charges by 62%. This then gave employee pension plans the opportunity to grow faster and help boost their retirement provision.

Staff have really appreciated this change, which has been boosted further by the better online tools available via the new scheme. These enable employees to interact with their pension and gain a better understanding of their retirement savings, which will become even more important as retirement planning becomes more prevalent for them.

Differences like this can greatly improve employee engagement and provide an employee benefit that is truly valued. In turn, this can be a beneficial tool in helping with retention and reduce recruitment costs.

There was an associated cost to the business for the scheme change, however this was comfortably covered by the introduction of Salary Exchange. This useful tool is an agreement between an employee and their employer where the employee agrees to reduce their gross salary in exchange for receiving pension contributions from their employer. This allows the employer to pay both their employee’s pension contributions and their own share, potentially leading to National Insurance savings for both parties.

Salary exchange is not a new concept and has been available for the 25+ years I have worked in the industry. Despite this however, a shocking number of companies still do not use this cost-saving tool and miss out on valuable NIC savings.

In this instance, the company NIC savings were around £12,000 per annum.

The key ingredient of successful implementation is undoubtedly communication. If employees do not truly understand how it works and the benefits, the take-up rate will be low, which negatively impacts the company savings.

When we help clients implement, we are achieving take-up rates of above 95% for eligible employees (very often 100%), meaning many clients have been able to partially offset their increased NIC whilst helping reduce the cost of their employees paying into the pension, which bucks the trend of “awful April”.

If your company is not already using Salary Exchange, I encourage you to explore this option. With some basic information, our Workplace Pension specialists can calculate the potential employer and employee NIC savings, allowing you to understand how beneficial it will be for your business.

Integrity365 has an experienced corporate pensions team that can work with you to evaluate your current workplace pension scheme and identify areas of improvement or better tax efficiency.

If you would like a no-obligation meeting to discuss potential Workplace Pension Scheme savings and benefits, please do not hesitate to get in touch with a MacDonald Partnership Independent Financial Adviser on 01463 242 242.