London pubs are employing more young people than ever, with over half (50.9%) of the workforce aged 16 to 24, according to 2024 research by Oxford Economics.
However, the British Beer and Pub Association (BBPA) has warned that recent Budget measures may force many establishments to make tough decisions to protect jobs in the sector.
Research commissioned by BBPA reveals London pubs now employ 56,000 under-25s, up from 26,040 in 2019.
Nationwide, the cost of National Insurance Contributions for under-25s has nearly doubled under the new Budget, rising from £82 million to £153 million.
The BBPA highlights the sector's vital role in offering young people and those seeking flexible work their first step on the career ladder.
Rising National Insurance Contributions and increased wage costs from the Budget may force pubs to make tough choices, such as halting recruitment or raising prices.
Emma McClarkin, CEO of the British Beer and Pub Association, warned that new regulations will have a devastating impact on the industry. She said, “Working in pubs is more than a job—it builds skills, confidence, and financial independence for young people, helping them afford essentials like rent and education.”
“To keep people employed and businesses viable, we urge the Government to reconsider the timing of these costs and deliver meaningful business rate reforms to sustain our role as a cornerstone of communities and the UK job market,” she added.
Asian Voice has spoken to several Asian or Desi pub owners in the UK about how they plan to balance staffing challenges amid rising costs.
Rising costs strains pubs business
Satnam Purewal, owner of The Red Lion in West Bromwich, highlighted the challenges posed by rising living costs and increased minimum wages, particularly in hospitality. He said, “With tightening profit margins, businesses often have no choice but to raise prices. About a third of our workforce are young adults most affected by wage increases, especially 18-year-olds. While they are invaluable, the sharp rise in wages strains budgets, forcing us to balance fair pay with financial sustainability.”
Purewal added that rising staffing costs are hindering expansion plans and making it harder to hire and retain quality staff. “These pressures are not unique to hospitality—they are being felt across industries,” he noted.
Satnam called on the government to introduce measures to ease the financial burden on pub businesses. He said, “The business rates relief introduced a few years ago was a lifeline, but its reduction, combined with rising employee contributions, is putting immense pressure on businesses. Many are reconsidering expansion plans or even workforce reductions, which stifles growth. Policies should encourage expansion, not create additional hurdles.”
Highlighting the broader role of pubs, Satnam added: “Pubs are more than places to drink—they are vital community hubs that reduce isolation and improve mental health. Rising business rates, taxes, and wages are driving up costs, making outings less affordable. In a world where remote work blurs home and office, pubs provide an essential escape. Supporting them isn’t just about economics; it’s about preserving spaces that foster social connection and well-being. The government must prioritise policies that keep these spaces accessible and thriving.”
Challenging period for slow business growth and uncertainty
Pradip Nale, owner of Ziya Asian Grill in Manchester, expressed concerns over the impact of rising National Insurance contributions following the latest budget changes. He said, “The recent announcement places the entire burden on employers, rather than sharing it between employers and employees. This is particularly challenging during a period of slow business growth and uncertainty. The prospect of further changes after April adds to our worries, making it a difficult time for businesses to move forward.
Addressing strategies to balance workforce and National Insurance costs, Pradip highlighted the advantage of the restaurants’ proximity to a university. “We attract students from various countries seeking part-time work, which helps us manage expenses while providing valuable job experience. By hiring young adults aged 18 to 25, we reduce costs and support their growth,” he explained.
Pradip emphasised the restaurant’s inclusive approach: “We prioritise candidates with strong communication skills, even if they lack experience, as we offer comprehensive training within 15 days to a month. Each year, we welcome a diverse workforce, providing opportunities to young people of all nationalities at both our restaurants.”
High staffing costs are major burden
Megha Khanna, co-owner of The Gladstone Arms, expressed concerns over rising costs and their impact on the hospitality industry. “The industry is already facing immense challenges, with thousands of pubs closing. High staffing costs are a major burden, especially as we focus on homemade food, which requires more staff and increases our expenses. If National Insurance contributions rise further, it will only worsen the situation, making it harder to manage costs and stay afloat,” she said.
Megha added that many of their staff are students or recent graduates in their first roles, and rising costs will significantly affect operations. “We rely on adequate staffing to ensure customer care, and cutting staff isn’t an option. We urge the government to address rising costs and implement measures to support struggling businesses like ours,” she said.
As an Asian pub, Megha highlighted their commitment to homemade dishes like curries and mint chutney, which set them apart but require more kitchen staff. “While 80% of our sales come from drinks and 20% from food, any increase in costs strains operations. Yet, reducing our homemade offerings isn’t an option—it’s what our customers love and what keeps them coming back.”
