In 2025, England will see the introduction of 13 new laws affecting everything from tax and National Insurance to pensions and beyond. These new laws will touch on areas such as parental leave, junk food advertising on TV, smoking and driving.
On a positive note, workers can look forward to an increase in the minimum wage. However, there will be rising costs too. To keep you informed, we’ve compiled a rundown here.
Non Dom status
Changes to the rules for non-domiciled individuals will take effect from April, fulfilling one of the party’s key election campaign promises. Currently, these ‘non-doms’ only pay UK tax on income earned within the country, with an estimated 37,000 exploiting this loophole.
National Insurance
Employer national insurance contributions (NICs) will rise by 1.2 points, from 13.8% to 15%. This tax is paid by employers on top of their employees’ wages, reports Birmingham Live.
The chancellor also confirmed that Labour will lower the earnings threshold at which employers start paying this levy from £9,100 to £5,000.
The government has maintained that the measure is not a tax on working people, despite some economists suggesting that the additional cost for employers will inevitably lead to slower wage growth in the near future. The Treasury predicts that the change will generate a net £19 billion in its first year.
Rent
In terms of renters, the ban on Section 21 ‘no-fault’ evictions is being implemented, fulfilling a promise initially made by the Conservatives in 2017. This legislation currently allows landlords to evict rental tenants with two months notice without needing to provide any reason.
It has been widely criticised by campaigners due to the lack of security it provides to renters.
Minimum wage to go up
Regarding wages, the national minimum wage increase will take effect on 1 April 2025. The national living wage will rise by £0.77 to £12.21.
For 18-20 year olds, the minimum wage will increase by £1.40 to £10.00 an hour, and for 16-17 year olds, it will increase by £1.15 to £7.55 an hour. These increases meet the government’s set remit, and the national living wage rate is expected to reach the highest real value in the history of the UK’s minimum wage.
The increase in the 18-20 year old rate narrows the gap between that and the national living wage, in anticipation of the adult rate being extended to 18 year olds in the future.
Parental leave and sick pay
Parental leave and sick pay are also areas of focus. Statutory payments, which are legal entitlements given to employees under certain circumstances such as illness, maternity, paternity, or bereavement, will see an increase in rates from April 2025 in the UK. The statutory sick pay (SSP) is set to rise from £116.75 to £118.75 per week, with a qualifying threshold of £125 per week.
Although the proposed Employment Rights Bill could make sick pay payable from the first day of illness, it’s unlikely this will be in effect by next April. Other statutory payments including maternity pay, maternity allowance, adoption pay, paternity pay, shared parental pay and parental bereavement pay will increase from £184.03 to £187.18 per week.
Pensions
In pension scheme news, the government announced on 13 November 2024 that it plans to introduce a new Pensions Scheme Bill in 2025. Key features include automatic consolidation of small deferred pension pots, a value-for-money framework for defined contribution (DC) schemes, and a requirement for occupational DC schemes to offer tailored retirement income solutions.
The Bill also introduces commercial defined benefit (DB) superfunds to enhance financial security for members. .
These reforms are part of the government’s ongoing pensions review, aimed at boosting investment, growing pension pots, and tackling inefficiencies. While significant changes to automatic enrolment aren’t expected soon, the second phase of the review in late 2024 will explore contribution levels and retirement adequacy.
Clampdown on advertising
In another public health initiative, government concern is escalating regarding childhood obesity and dental problems, with statistics showing that one in ten children entering reception classes are obese, and tooth decay affects one in five by the age of eleven. With the well-being of young people under threat, having implications for long-term health issues and imposing significant costs on the NHS —running over £11 billion annually—the Government has decided to take decisive action to mitigate these challenges.
Recognising that the advertising of unhealthy foods significantly influences children’s eating habits from an early age, and increases their likelihood of becoming overweight or obese, necessary regulations are being introduced.
The Government announced: “That’s why we’re taking steps to stop the targeting of junk food ads at kids from October 2025 which we estimate will prevent around 20,000 cases of childhood obesity. This change will help to ensure our children get the best and healthiest start in life.”
Looking ahead, the discourse anticipates further public health legislation addressing single-use vape products and comprehensive measures for tobacco and vaping, furthering the commitment to safeguarding the nation’s health.
Disposable vapes ban
Health, waste and enforcement organisations have applauded the Government’s decision to ban the sale of disposable vapes from 1st June 1. Groups such as Action on Smoking and Health (ASH), Material Focus and the Chartered Trading Standards Institute have been working together to highlight the environmental impact of these single-use products and their role in the rise of teen vaping.
Electric vehicle tax
From 1st April 2025, electric vehicle (EV) drivers will start receiving their first tax bills through Vehicle Excise Duty (commonly known as ‘road tax’), as their exemption from this tax comes to an end. This policy was introduced by former Tory chancellor Jeremy Hunt.
EVs registered after the tax takes effect will be subject to a lower first-year rate of £10, while those registered before this date will face the standard rate of £190 per annum. The exemption that EVs currently enjoy from the Expensive Car Supplement is also being scrapped, meaning owners of cars worth more than £40,000 will have to pay an additional £410 per year for the first five years of ownership.
The railways are being nationalised.
Labour is set to renationalise three rail operators next year, but this move isn’t expected to result in lower fares for passengers. Transport Secretary Heidi Alexander acknowledged the importance of “affordability is really important to people” but suggested that people are “willing to pay for a good service”.
This comes as the government confirmed South Western Railway will be renationalised in May 2025, C2C in July 2025, and Greater Anglia in autumn 2025, following Labour’s passing of a law permitting such action.
Leasehold changes
In other news, changes to the leasehold system will come into effect from January. The government will eliminate the two-year ownership requirement to qualify for a lease extension for a flat and for buying the freehold of a leasehold house.
From spring, access to Right to Manage (RTM) will be expanded, allowing more leaseholders in mixed-use buildings to take over management from their freeholders. In most cases, leaseholders pursuing RTM will no longer have to cover their freeholder’s costs.
Travel to and from the UK
From 2025, travellers heading to Europe will need to secure an approved ETIAS online before setting off on their journey. Given that Europe sees over 37 million visitors annually, this new requirement is likely to significantly affect travel plans globally.