The recent UK Budget introduced an increase in the rate of employer National Insurance Contributions (NICs) —from 13.8% to 15% and a reduction to the NIC threshold from £9,100 to £5,000 a year. This change could lead to higher employment costs for your clients, particularly those supporting employees through long-term absence.

A financial consideration for your clients

When an employee is absent due to illness or injury and is eligible for a benefit under a Group Income Protection (GIP) policy, the employer may still be liable to pay NICs on that benefit. With the increase in employer NI rates, these liabilities could now have a greater financial impact on your clients.

This may be especially relevant to:

• SMEs, where one long-term absence could have a proportionally greater financial impact
• Larger employers, where the cumulative cost of multiple long-term absences can quickly add up

Every business is different. The suitability of insuring employer NICs will depend on your client’s specific policy structure, workforce profile, and business needs.

An opportunity to add value

One way your clients can help manage this is by insuring employer NICs as part of their GIP policy. This optional feature can support their ability to budget for long-term absence and reduce the financial uncertainty associated with additional liabilities. While not automatically included, this benefit can be a valuable part of a broader workforce risk management strategy.

For clients considering this option, it may offer:

• More predictable financial planning
• Additional support for their long-term absence management strategies

This feature is not included by default and must be selected when setting up or reviewing a policy. Cover is subject to specific terms, conditions, and exclusions as detailed in the policy documentation.

Supporting client strategies and employee wellbeing

Now is a great time to talk to your clients about the impact of the NI increase—especially if they're reviewing how they support long-term absence or manage employment costs. The optional NICs cover can form part of a client’s wider strategy around workforce resilience and employee support. While it serves as a financial safeguard for the business, it can also enhance the employee benefits package—especially if positioned and communicated effectively.

Speak to your Unum representative to find out how we can support you in these conversations and help assess the best options for your clients and register your interest below for upcoming webinars to learn more about how our products and services can help your clients.