The UK Government is set to review auto-enrolment rates in workplace pensions, aiming to address the “adequacy” of pension savings. Introduced in 2012, the current requirement mandates 8% of earnings to be contributed to pensions, with at least 3% from employers. The pension fund industry advocates for an increase to 12%, which could impose additional costs on firms already facing higher minimum wage and national insurance payments. Despite over 11m people being auto-enrolled, concerns persist that many Britons are not saving enough for retirement. According to the think tank arm of the FTSE 100 investment giant Phoenix, 17m adults in the UK are inadequately building their pension pots. Pensions minister Torsten Bell is expected to initiate the review before parliament’s July recess.

Small businesses are calling on Angela Rayner to provide a sick pay exemption in her proposed workers’ rights reforms. The Employment Rights Bill aims to implement statutory sick pay from the first day of employment, with the current waiting period of three days removed so it is paid from the first day they are off work. However, small businesses warn that these changes could cost them millions and hinder their ability to hire new staff. According to the Federation of Small Businesses, 35% of small business owners believe a sick pay rebate would encourage them to employ more individuals currently out of work. The bill’s impact assessment suggests that costs for SMEs could rise from £400m to approximately £660m.

More than five million workers may face a 10% effective tax charge on their pension contributions within the next four years, warns Guy Opperman, former pensions minister. He predicts that a flat rate of 30% tax relief on pension contributions is “inevitable” as the number of higher-rate taxpayers rises due to frozen tax thresholds. While those earning below the higher rate threshold could benefit from the flat rate, higher earners would effectively incur a 10% tax charge on their pensions. The total net cost of pension tax relief and national insurance contributions reached £48.7bn in 2022-23, according to HMRC.

According to a study by Chrysalis, nearly a quarter of workers took multiple days off due to anxiety, depression, and stress in the past year, resulting in a staggering £45bn annual cost to employers. The research highlights that over a third of employees reported decreased productivity due to these mental health issues, with 12.8m working days lost. The findings also reveal a “national crisis of resilience,” as many workers struggle to access mental health support, with 20% considering quitting their jobs due to inadequate services. Critics argue that proposed cuts to disability benefits may further exacerbate the situation.

A report from investment bank Stifel reveals that Labour’s windfall tax on oil and gas producers will leave 1.5bn barrels of oil and gas stuck in abandoned North Sea oil wells. The report said: “The UK North Sea industry is being destroyed by taxes that are too high, taxes which threaten energy security, jobs, investment and economic growth. The impact of lower investment and production is already being felt through job losses, lower tax receipts and more energy imports.” It went on: “The Office for Budget Responsibility’s current forecast for North Sea tax receipts to 2030 is £10bn too high due to declining production and lower energy prices.” Meanwhile, KPMG warns that falling gas prices and the soaring cost of offshore wind means net zero – switching from gas to renewables – is unlikely to bring down energy bills in the near future.

Retail sales volumes increased by 1.2% month-on-month in April, significantly surpassing the 0.2% forecast by economists. The Office for National Statistics (ONS) reported a 1.8% rise in retail sales volumes from February to April. Food store sales surged by 3.9%, attributed to “the good weather,” while non-food store sales fell by 0.7%. Matt Swannell, chief economic advisor to the EY ITEM Club, remarked: “The retail sales data has been exceptionally strong in recent months, but it’s unclear as to whether underlying conditions are quite as robust as the data suggests.” The outlook remains mixed, with economic uncertainties and high living costs impacting consumer behaviour.

Nearly 2m individuals are projected to be affected by a £9bn “stealth tax bombshell” by 2030, as they are pushed into higher tax brackets due to frozen income tax thresholds. The Liberal Democrats commissioned figures indicating that 1.9m more people will face increased tax burdens as the Government maintains the current threshold until April 2028. Daisy Cooper, the Lib Dem Treasury spokeswoman, said: “During the midst of the worst cost of living crisis for a generation, people are now set to be hammered once again by this stealth tax bombshell.” The freeze, initially implemented by the previous Conservative Government, has resulted in a significant rise in higher-rate taxpayers, with 5.1m now paying the higher rate, a 15.3% increase from the previous year.

Caisse de dépôt et placement du Québec, Canada’s second-largest pension fund, plans to increase its allocation to UK assets by 50% over the next five years.

UK businesses are increasingly shifting their focus from traditional EU markets to faster-growing economies like China and the US, according to the latest Santander Trade Barometer. Jane Galvin, head of corporate clients at Santander UK, notes that “commercial viability clearly takes precedence over geopolitical positioning.” The report reveals that 52% of UK firms now view overseas trade as more critical due to domestic economic challenges, a significant increase from five years ago. While the UK Government is engaged in diplomatic efforts, businesses are already adapting to new market realities, with China re-entering the UK’s top ten export destinations.

Nine out of ten UK companies are optimistic about enhancing international trade over the next two years, as revealed by HSBC’s research. A significant 92% of surveyed businesses anticipate an increase in exports, despite challenges such as rising costs and tariffs. Stephanie Betant, head of global trade solutions at HSBC UK, said: “We know how resilient UK businesses are and they’re right to be optimistic about their long-term international growth.” However, concerns about rising costs persist, with 69% of businesses expecting increased expenses amid global economic uncertainty. Additionally, 89% are renegotiating supplier contracts to manage costs, while 87% are considering reshoring production. Recent trade agreements with India, the US, and the EU further bolster this positive outlook.

Over the past three years, developers have invested nearly £3.5bn in converting UK offices into alternative uses, such as hotels, flats, and laboratories. According to data from CBRE, developers have sold 5.9m sq ft of office space, equivalent to about 12 Gherkin buildings, for this purpose. The pandemic has triggered a “flight to quality”, leaving many older office spaces vacant. Colin Thomasson, head of UK investment properties at CBRE, noted a “significant shift in the UK real estate landscape,” stating that “repurposing secondary office assets into vibrant, multifaceted spaces” was a viable solution to meet demand. The type of conversion varies by location, with residential uses dominating in cities like Bristol and Glasgow, while Cambridge, Oxford, and London see a rise in laboratory conversions due to a shortage in life sciences space.

Gen Z is increasingly attracted to Sark, a small British Crown Dependency in the English Channel, where residents enjoy the benefit of not paying income tax. Sark’s Government is funded through property tax and duties on imports, while tourism plays a significant role in its economy. The island, with a population of around 500, sees its numbers double during the tourist season.