Blog > News > HR’s key takeaways for the Spring Budget 2023

HR’s key takeaways for the Spring Budget 2023

Last week on the 15th of March, Chancellor Jeremy Hunt gave his 2023 budget announcements in parliament. This included increasing the workforce and adjustments to pensions.

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Spring Budget 2023

Last week on the 15th of March, Chancellor Jeremy Hunt gave his 2023 budget announcements in parliament. This included increasing the workforce and adjustments to pensions.

The main aim for Hunt is to fill labour shortages and get the economy’s inactivity back to work.

Currently, there are one million jobs in the UK but seven million adults of working age are not in work. The Spring Budget intends to help get these people into work by breaking down the barriers that exist.

The three groups Hunt wants to focus on to tackle the economy’s inactivity are those with long-term illnesses, working parents and over 50s. However, this only covers some economically inactive people as they are a diverse group.

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    Support for people with long-term illnesses and the disabled

    The first announcement for this group of people is a new Universal Support system. This aims to help the job search structure for disabled people.

    The next thing Hunt addressed was the issue of people who had left work because of physical or mental health issues. He announced a £400 million plan to increase mental health and musculoskeletal resource availability.

    The expansion of the Individual Placement and Support scheme was another announcement to help get these people back into work.

    This would look at employment support services that would be included within community mental health groups.

    There are also going to be two consultations on how to improve occupational health. Another announcement was that funding for small company financial support will be also doubled.

    a disabled workers benefits from the spring budget by working from home

    Support for working parents

    A further aim for the chancellor in the Spring Budget is to help parents, especially mothers, with high childcare costs.

    Hunt said that almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.

    He announced that all adults who are working at least 16 hours, will receive 30 hours of free childcare for children over the age of nine months.

    Before the Spring Budget, this was only available for three and four-year-olds. Now free childcare will be immediately available after maternity or paternity leave ends. This allows parents to return to work more easily.

    A further increase in funding will also be available for ‘wraparound care’. This will help provide childcare for school-age children between the times of 8 am and 6 pm.

    two children play at nursery with the help of free childcare

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    Support for workers over 50 and pension changes

    A recent study by Age UK revealed that there are 3.5 million pre-retirement people over 50s who are not part of the workforce. This is a 320,000 increase from before the pandemic.

    The chancellor announced several plans to tackle this. One is to introduce a Midlife MOT programme, which would include financial, health and career guidance before retirement.

    Further plans are to create returnships and over 50’s apprenticeships. The hope for these is to focus on flexibility and prior experience to cut the time training.

    A dramatic change that Hunt has announced is the promise to end the Lifetime Allowance which was limited to £1 million.

    This should tackle problems with the pension tax thresholds that cause early retirement, especially in NHS doctors.

    An increase in people’s pension’s annual tax-free allowance has also been announced. This will increase by 50% from £40,000 to £60,000.

    a pre-retirement worker gets back into work at a garden centre.

    HR employer advice and support with Employer’s Direct

    The changes brought by the Spring Budget could see numerous benefits to employers and their employees.

    Hiring new talent might become easier for employers with the support that will be provided by the government too. However, navigating HR and employment law alone can be daunting. That’s why we offer HR advice and support.

    We provide free support if you’re an employer and need advice on HR issues. We offer 24/7 help to guide you through the process.

    Please speak to one of our HR and employment law advisors free at 0800 144 4050. Fill in the form here to request a callback.

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    FAQs

    We’re here to answer any questions you might have with expert ease.

    The main aim of the Spring Budget is to increase the labour supply and support people to move into employment.

    The six main things employers need to know about are Universal support, support for occupational health to keep people at work, apprenticeships for over 50s, lowering pensions tax, childcare costs to support working parents and raising corporation tax.

    One positive for small businesses is that the annual investment allowance for will increase to £1 million.

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