PAVO seeks feedback on Impact of employer National Insurance hike on Powys third sector
Powys Association of Voluntary Organisations (PAVO) is inviting voluntary organisations and charities across Powys to share how the recently announced increase in employer national insurance (NI) contributions may affect their operations.
The rise, introduced in the UK Government’s 2024 Autumn Budget, has raised concerns across the Third Sector. From April 2025, the employer NI rate will increase by 1.2 percentage points, from 13.8% to 15%, while the threshold at which employers start paying NI on employee salaries will drop from £9,100 to £5,000.
Clair Swales, PAVO CEO, said: “The increase in employer National Insurance contributions will place considerable financial pressure on voluntary sector organisations in Powys.
“Many of these organisations are crucial partners in delivering essential services and they already operate under tight budget constraints. Without adequate support, many may be forced to reduce or cease services altogether.
“While public sector employers will receive reimbursement for the additional costs, no equivalent measures have been announced for the Third Sector.
“This, coupled with rising costs, static or reduced funding, and growing demand for services, creates a potentially catastrophic situation.”
One Powys-based mental health charity, which supported over 1,300 county residents last year, estimates that the NI rise will add at least £15,000 to its operating costs next financial year. This will significantly strain its ability to meet demand. With waiting lists for many of its services already long, the organisation fears the increased costs could further limit its capacity to support those in need.
Feedback from local organisations will be shared with Wales Council for Voluntary Action (WCVA) to inform advocacy efforts aimed at securing solutions and support for the sector.
Earlier this month, Clair Swales joined other sector leaders in signing a WCVA-coordinated letter to the Welsh Government. The letter urged the government to consider the financial strain on voluntary organisations in its upcoming draft budget and to uplift grants and contracts to reflect inflationary pressures and the additional tax burden.
“Urgent adjustments are needed to ensure the sustainability of our sector,” Clair Swales added. “PAVO encourages all Powys-based voluntary organisations and charities to share their experiences and concerns to build a strong case for action.”
Leave your feedback in English at: https://www.haveyoursaypowys.wales/impact-of-upcoming-national-insurance-rise-on-voluntary-organisations-and-charities-2
