A staggering 83% of UK business are concerned about rising costs in 2025, while over two thirds said payroll costs were a major concerns and nearly as many flagged risks around upcoming legislative changes (64%), found the annual Employer Confidence Index by Peninsula Group.

Businesses were caught out by the unexpectedly high increases in employers national insurance which put their budgeting into disarray.

From 1 April 2025, the hike in employers National Insurance to 15% and a 6.7% minimum wage rises will be the most expensive factors, hitting businesses across the board. Peninsula said it was ‘no surprise’ companies fear rising costs and an increase in payroll spending.

‘Huge percentage increases to minimum / living wage rates year-on-year are having a major impact on our business,’ said one respondent to the survey.’ These increases also force demand for wage increases from staff above the minimum wage level to “keep their margin”.

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