Autumn Budget 2024: The landscape for insurance brokers

New government changes are coming in April 2025, and they could make running a business more expensive. Insurance brokers and their clients need to prepare now. 

UK insurance brokers are facing a pivotal moment as the Autumn Budget 2024 introduces sweeping changes set to significantly impact their operations and SME clients alike. 

From April 6, 2025, the government will implement a range of financial reforms, including increases to national insurance contributions (NICs), the national minimum wage, and capital gains tax (CGT). 

Small and medium-sized enterprises (SMEs) – which make up 99% of UK businesses and employ over 60% of the workforce – will feel the biggest impact. Insurance brokers, many of whom work with SMEs, will need to respond quickly to help clients and manage their own rising costs. 

What’s changing? 

Under the new budget, which kicks in on 6 April 2025: 

• Employers will pay more in national insurance: the rate is rising from 13.8% to 15%. 

• The earnings threshold for employer NICs is dropping, from £9,100 to £5,000. 

• The national minimum wage is increasing by 8%. 

• Capital gains tax (CGT) will rise from 20% to 24%, affecting business investments. 

For insurance brokers, many of whom operate as SMEs themselves or serve SME clients, these changes are likely to increase operational costs and reshape the demands placed on advisory services. 

The dual impact of higher NICs and rising wage obligations may lead to tighter margins and constrained cash flow for brokerages. Brokers will need to remain agile, finding ways to reduce expenses, update their pricing, and adjust their business models to be more efficient. 

More business, more pressure 

As SMEs grapple with the implications of the budget, brokers are expected to experience a surge in client engagement. Business owners are likely to seek guidance on risk management, cover suitability, and cost-effective insurance options. 

This rising demand could stretch existing resources, pushing firms to invest in professional development and staff training. Brokers will need to provide more tailored, strategic advice while also handling an influx of queries from clients potentially considering reducing or cancelling coverage to save money. 

Julian Hucks, founder and managing director of digital insurer Starpeak, warned against these measures: 

“Cutting back on insurance may be tempting for small businesses as they look to shave costs, but it may leave them exposed to substantial risk. Instead of sacrificing insurance cover completely, small businesses should explore more tailored and competitive insurance options. By doing this, organisations can remain protected in a way that is most aligned to their budgets and specific needs.” 

How can brokers react? 

The Autumn Budget 2024 is bringing big changes. Brokers who stay informed, plan ahead, and focus on helping clients will be more likely to succeed.  

SMEs under financial strain will be more receptive to innovative, budget-conscious insurance products that don’t compromise on protection. By developing niche offerings and enhancing advisory services, brokers can strengthen client relationships and improve retention.  

The heightened focus on financial planning and operational efficiency also provides scope for brokers to reposition themselves as long-term strategic partners. 

This is a time for insurance professionals to be proactive, stay flexible, and continue delivering great service – even as the economy shifts. 

 Image credit: © baseimage via Canva

Josie Geistfeld Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.geistfeld@barkerbrooks.co.uk