The Conservatives have pledged to cut employers’ National Insurance from 15 per cent to 7.5 per cent for workers aged between 21 and 24 if the party wins the next general election. The proposal, announced by party leader Kemi Badenoch, is intended to reduce the cost of hiring younger workers amid concerns over unemployment and graduate recruitment.
Under the plan, employers could save an average of £1,500 a year for each young adult they employ, according to the Birmingham Mail. Conservative officials estimate that the policy would cost £2.3 billion after accounting for additional tax receipts and lower spending on Universal Credit.
The announcement comes as the Conservatives seek to make youth employment a central part of their economic policy. Badenoch described the proposal as part of a “rescue plan for young people”, while arguing that younger workers face particular difficulties entering the labour market.
According to GB News, an estimated 981,000 people aged 16 to 24 in the UK were not in education, employment or training between April and June 2026, based on the latest Office for National Statistics figures cited in its report.
Conservatives Say Lower Employer Contributions Could Support Youth Hiring
The proposed reduction would apply specifically to employees aged 21 to 24, leaving the employer National Insurance rate unchanged for most other workers. Badenoch said there was a “graduate recruitment crisis” and argued that reducing the tax burden associated with younger employees could encourage businesses to take them on.
“We are being fiscally credible. We find savings, and then we spend it,” she told the BBC in comments reported by GB News. “If I could afford to cut it for everybody, I promise you that I would. But young people have a much worse problem than everybody else.”
Conservative officials put the policy’s initial, or “static”, cost at £3.25 billion. They estimate that this would fall to £2.3 billion in 2029-30 once higher tax receipts from additional employment and lower Universal Credit spending were taken into account.
The party says tens of thousands of young people could enter employment under the measure. Shadow chancellor Andrew Griffith said the cost of employing younger workers had risen because of National Insurance, employment regulation and increases in the minimum wage.
The proposal follows another Conservative policy affecting unemployed people under 25. Under plans announced the previous week, people aged 16 to 24 who had not worked continuously for six months would be unable to claim Universal Credit if the Conservatives returned to government.
Labour and Reform UK Challenge the Conservative Proposal
Labour rejected the National Insurance plan, describing it as “fantasy economics” and “unfunded”. A party spokesperson argued that the Conservatives had previously presided over high numbers of young people being outside employment or training.
Labour also pointed to its own measures, saying its government was investing £2.5 billion to help young people enter work, including the national rollout of a Jobs Guarantee.
The Conservatives, meanwhile, said they would publish a savings plan explaining how their proposal would be funded. Badenoch maintained that the policy was financially credible because savings would be identified before the money was spent.
Reform UK also criticised the proposal. Robert Jenrick, the party’s Treasury spokesman and a former Conservative frontbencher, said the Conservatives were “fiddling around the edges”.
He said Reform UK would instead reverse the National Insurance increase for all British workers and fund the measure through a tax on migrants. The competing responses leave employer National Insurance, youth employment and the cost of hiring younger workers firmly within the economic debate ahead of the next general election.
