Overview of ERA 2025

The Employment Rights Act 2025 is the most significant reform to UK employment law in a generation. Its provisions are being implemented in stages between 2025 and 2027. The most impactful changes for most employers came into force on 6 April 2026.

SSP from day one — 6 April 2026

From 6 April 2026, Statutory Sick Pay (SSP) is payable from the first day of absence. The three waiting days that previously applied have been abolished.

This means that for every day an employee is sick from their first day, you must pay SSP. A two-day illness that previously cost you nothing now costs you two days of SSP. Budget accordingly and ensure your payroll is updated.

Day-one family leave rights — 6 April 2026

From 6 April 2026, the following are day-one rights — no qualifying period applies:

• Paternity leave — previously required 26 weeks' continuous employment. Now a day-one right.
• Unpaid parental leave — previously required one year's continuous employment. Now a day-one right.
• Bereavement leave for bereaved partners — new right, up to 52 weeks, day-one right.

Maternity leave and adoption leave remain day-one rights as before. The change means that an employee who starts work on Monday and whose partner gives birth on Friday is immediately entitled to paternity leave.

Unfair dismissal qualifying period — from January 2027

Currently, employees need two years' continuous employment before they can claim unfair dismissal. From 1 January 2027, this drops to six months.

This is one of the most significant changes for employers. From January 2027, you are effectively exposed to unfair dismissal claims from an employee's seventh month of employment. Implications:

• Probation periods and performance management processes become more important from day one
• Document all performance concerns, warnings, and disciplinary steps from the start of employment
• Any dismissal within the first two years that might previously have been straightforward now needs to follow a fair process
• Compensatory award cap is also being removed from January 2027 — currently £123,543

National Minimum Wage 2026

Ensure all employment contracts, offer letters, and payroll systems reflect the April 2026 rates. Paying below NMW is a criminal offence with penalties of up to £20,000 per worker.

What you must update in employment contracts

• Remove any reference to three SSP waiting days
• Remove any reference to the Lower Earnings Limit for SSP eligibility
• Update paternity leave to reflect day-one right (no qualifying period)
• Update parental leave to reflect day-one right
• Add bereavement partner leave provisions
• Update NMW rates if referenced in the contract
• Review and update probation period terms given the January 2027 unfair dismissal changes
• Trade union notification requirement — add to written statement from October 2026

What happens if you die without a Will

If you die intestate (without a valid Will), the intestacy rules determine who inherits your estate. The rules follow a strict order of priority — spouse/civil partner first, then children, then other relatives. Cohabiting partners receive nothing under the intestacy rules, regardless of how long you have been together.

Your estate may also pay more Inheritance Tax than necessary, as the intestacy rules do not allow for IHT planning strategies that a Will can implement.

Requirements for a valid Will

• You must be 18 or over (with limited exceptions for military personnel)
• You must have testamentary capacity — you understand what a Will is and what you own
• The Will must be in writing
• You must sign the Will in the presence of two witnesses
• Both witnesses must sign in your presence and in each other's presence
• Witnesses cannot be beneficiaries — if a witness is also a beneficiary, they lose their gift

What to include in your Will

Executor appointment

The executor administers your estate — collects assets, pays debts, distributes what remains. Appoint at least two. Many people appoint a trusted family member or friend, sometimes alongside a professional such as a solicitor.

Specific gifts

Items of sentimental or financial value you want to leave to specific people — property, money, jewellery, art. Be specific — "my gold watch" not "my watch".

Residuary estate

Everything not covered by a specific gift. This is the most important clause — it catches all assets not explicitly mentioned.

Guardianship for minor children

If you have children under 18, appoint a guardian. Without this, a court decides who raises your children. This is one of the most important reasons young parents need a Will.

Survivorship clause

Specifies what happens if a beneficiary dies shortly after you — typically within 28 or 30 days. The Law Society recommends including this to avoid a double probate situation.

Letter of Wishes

A non-binding document alongside the Will expressing your preferences for matters the Will cannot cover — funeral arrangements, how personal possessions should be divided, guidance for trustees of a discretionary trust.

Inheritance Tax and your Will

The nil-rate band is £325,000. Assets above this threshold are taxed at 40%. The residence nil-rate band adds up to £175,000 if you leave your home to direct descendants.

Leaving assets to a spouse or civil partner is IHT-exempt and also transfers their nil-rate band to you — meaning a couple can effectively pass £1 million free of IHT.

When to update your Will

• Marriage or civil partnership — a new marriage automatically revokes an existing Will in England and Wales
• Divorce — does not revoke a Will but the ex-spouse is treated as having died on the date of divorce
• Birth of children or grandchildren
• Death of an executor or beneficiary
• Significant change in assets — property purchase, inheritance, business sale
• Before April 2027 — pension IHT changes may require restructuring

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