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The Federation of Independent Retailers (NFRN) warns that increases to the national minimum wage and National Insurance contributions to fund social care could force local stores out of business.

The increase in the national minimum wage will be announced by the government this autumn and will come on top of a 1.25% increase in NI contributions paid by both employees and employers.

For an employee earning an annual salary of £20,000, the employer and employee will each pay an additional £130 a year in contributions.

The increase in the national minimum wage will also cause an increase in pension contributions being paid.

NFRN National President Stuart Reddish said: “While the government is taking steps to solve major problems in our health and social care, a large part of the burden of these changes will hit already hard pressed retailers.

“The cumulative effect of the NI changes, minimum wage increase and resultant increases in pension contributions will push more local businesses towards not being financially viable. Every store put out of business will have a detrimental effect on their local communities.

“We can only hope that the government realises the dangers for the independent retail sector and takes the opportunity to relieve at least some of the burden on store owners, as part of the business rates review this autumn.”

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