Chancellor's Spring Budget

The Chancellor’s spring budget was focused on getting people back into work and included several initiatives to achieve this objective. 

Here is a summary of the key points that employers need to be aware of and how they will help get people into work:

Universal support scheme to help disabled people get into work 

A new voluntary scheme called “universal support” will be implemented for those with disabilities and health conditions in England and Wales. The Chancellor said that under the scheme up to £4,000 per individual will be invested to help them find a suitable role “to cater to their needs.” The support will be available to 50,000 people per year.

Alongside this, the welfare system will be reformed including ending work capability assessments to enable claimants to return to work without fearing a loss in financial support.

Increased support for occupational health services

The Chancellor directly referenced employees who are long-term sick with conditions such as back pain or mental health issues. He said, “we should give them support before they end up leaving their job.” Part of the support will come in the form of a £406 million plan to improve the availability and accessibility of occupational health.  

It is hoped that the investment in occupational health services will help:

• Employers to support long-term sick employees to remain in work (e.g. by identifying reasonable adjustments that work for the organisation and the employee)
• Individuals who are out of work due to health reasons find the support and guidance they need to be able to return to the workplace.

Apprenticeships for the over 50s

The Chancellor has coined a new term “returnerships” which will be the equivalent of apprenticeships for the over 50s. Aimed at attracting older workers back into employment these schemes will enable structured retraining in sector-based work academies. The scheme will give individuals a pathway back to work where their experience and knowledge can be bought back into organisations.  

The concept of “returnerships” immediately raises questions about what type of contact, pay and benefits should be offered and this is an area we will monitor and advise you on again. Also older returning workers are likely to be looking for specific benefits built around flexible working patterns, private health and enhanced pension contributions.

Reducing childcare costs

The Chancellor announced reforms in childcare to “increase the availability of childcare, reduce costs, and increase the number of parents who use it.”

It was announced that by April 2025, 30 hours of free childcare will be available to every child with working parents. This will be introduced across two phases.  

By April 2024 - 15 hours of free childcare for working parents of two-year-olds will be in place.  

By September 2024 – 15 hours of free childcare for working parents of children aged nine months to three years. 

Additionally, funding will be given to schools and local authorities to provide breakfast clubs and after-school, clubs to extend the care available for children and thereby enable parents to have greater flexibility to undertake work. 

Lower pension tax to incentivise highly skilled individuals to work 

The Chancellor has increased the tax-free annual allowance for pensions from £40,000 to £60,000 to incentivise highly skilled workers to stay in work.  

The lifetime allowance charge will also be abolished to “simplify the tax system” and encourage people to stay at work and reduce the temptation to retire early. This change will also be a boost for group life assurance schemes resulting in less tax when the benefit payout is combined with the value of registered pensions.