BRC warns UK retail jobs at risk as regulations loom for 2025 and beyond
The British Retail Consortium (BRC) has released a report highlighting the significant decline in retail employment, with job loss exceeding 350,000 since 2015.
This drop is nearly tenfold the entire employment in the UK steel industry, which has seen substantial government action to avert factory shutdowns and preserve jobs.
According to the Retail Employment in 2025 report, upcoming regulatory measures may continue to suppress job growth in the retail industry into 2025 and potentially for longer still.
Despite the retail sector shedding a number of positions, in the BRC's view policy interventions have been notably absent.
Retail is grappling with an increasing tax, cost and regulatory burden, unlike other sectors such as fishing, steel manufacturing and automotive, which have received more government support.
Adjustments to employer National Insurance contributions have imposed a £2.4bn financial burden on the retail industry, and the rise in the National Living Wage in April has added another £2.7bn to retailers' wage expenses.
Since that time, the expense of hiring a full-time entry-level employee has increased 10.3%, and the cost for part-time staff by 13.5%.
The retail sector is the UK's largest private sector employer with a workforce characterised by youth and diversity. Latest figures from the Office for National Statistics indicate that as of the fourth quarter of 2024 reveal that it employs 2.9 million people and supports an additional 2.7 million jobs within the supply chain.
Retail jobs offer significant flexibility and are a crucial source of local employment. With more than 1.5 million part-time positions, the sector allows individuals to work around personal commitments such as studies and childcare.
Retail also provides essential entry-level opportunities and flexibility for those re-entering the workforce. As a significant employer in nearly every parliamentary constituency, retail offers jobs not only in major cities but also in towns and villages nationwide.
The Employment Rights Bill, although intended to improve employment practices, could inadvertently increase costs and reduce employment without benefiting workers.
A survey of retail HR directors revealed that 61% believe the Bill would lessen job flexibility, and over half anticipate that it would lead to staff reductions in their companies.
However, there are potential opportunities ahead. The introduction of the new Growth and Skills Levy, set to replace the ineffective Apprenticeship Levy, may enable retail businesses to invest more in local communities and upskill their workforce, with an estimated 40% to 50% of employees in need of further training.
BRC CEO Helen Dickinson stated: 'Retailers face uncertainty around the new Growth and Skills Levy, on the outcome of the business rates reforms and on implementation of the Employment Rights Bill which could make it more difficult to offer flexible part-time roles or reskill people. Reducing part-time and training opportunities in retail would not only be a loss to the industry, the UK's largest private sector employer, but would also punish millions of people who benefit from these flexible, local jobs.
'We estimate 160,000 part-time roles – more than one-in-ten – in the industry are currently at risk from being lost in the next three years. But there is another way. If government can ensure future policies do not hold back recruitment and training, then they will reap the benefits through more jobs and better productivity. The Employment Rights Bill is the next big test: government must tackle unscrupulous employers without hampering employment opportunities offered by responsible businesses.'
"BRC warns UK retail jobs at risk as regulations loom for 2025 and beyond" was originally created and published by Retail Insight Network, a GlobalData owned brand.
The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
7 hours ago
- Yahoo
BRC warns UK retail jobs at risk as regulations loom for 2025 and beyond
The British Retail Consortium (BRC) has released a report highlighting the significant decline in retail employment, with job loss exceeding 350,000 since 2015. This drop is nearly tenfold the entire employment in the UK steel industry, which has seen substantial government action to avert factory shutdowns and preserve jobs. According to the Retail Employment in 2025 report, upcoming regulatory measures may continue to suppress job growth in the retail industry into 2025 and potentially for longer still. Despite the retail sector shedding a number of positions, in the BRC's view policy interventions have been notably absent. Retail is grappling with an increasing tax, cost and regulatory burden, unlike other sectors such as fishing, steel manufacturing and automotive, which have received more government support. Adjustments to employer National Insurance contributions have imposed a £2.4bn financial burden on the retail industry, and the rise in the National Living Wage in April has added another £2.7bn to retailers' wage expenses. Since that time, the expense of hiring a full-time entry-level employee has increased 10.3%, and the cost for part-time staff by 13.5%. The retail sector is the UK's largest private sector employer with a workforce characterised by youth and diversity. Latest figures from the Office for National Statistics indicate that as of the fourth quarter of 2024 reveal that it employs 2.9 million people and supports an additional 2.7 million jobs within the supply chain. Retail jobs offer significant flexibility and are a crucial source of local employment. With more than 1.5 million part-time positions, the sector allows individuals to work around personal commitments such as studies and childcare. Retail also provides essential entry-level opportunities and flexibility for those re-entering the workforce. As a significant employer in nearly every parliamentary constituency, retail offers jobs not only in major cities but also in towns and villages nationwide. The Employment Rights Bill, although intended to improve employment practices, could inadvertently increase costs and reduce employment without benefiting workers. A survey of retail HR directors revealed that 61% believe the Bill would lessen job flexibility, and over half anticipate that it would lead to staff reductions in their companies. However, there are potential opportunities ahead. The introduction of the new Growth and Skills Levy, set to replace the ineffective Apprenticeship Levy, may enable retail businesses to invest more in local communities and upskill their workforce, with an estimated 40% to 50% of employees in need of further training. BRC CEO Helen Dickinson stated: 'Retailers face uncertainty around the new Growth and Skills Levy, on the outcome of the business rates reforms and on implementation of the Employment Rights Bill which could make it more difficult to offer flexible part-time roles or reskill people. Reducing part-time and training opportunities in retail would not only be a loss to the industry, the UK's largest private sector employer, but would also punish millions of people who benefit from these flexible, local jobs. 'We estimate 160,000 part-time roles – more than one-in-ten – in the industry are currently at risk from being lost in the next three years. But there is another way. If government can ensure future policies do not hold back recruitment and training, then they will reap the benefits through more jobs and better productivity. The Employment Rights Bill is the next big test: government must tackle unscrupulous employers without hampering employment opportunities offered by responsible businesses.' "BRC warns UK retail jobs at risk as regulations loom for 2025 and beyond" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
7 hours ago
- Yahoo
What salary sacrifice changes could mean for your pension
The government has insisted recent reports indicating that it is considering changes to salary sacrifice pension schemes are "purely speculative". It comes off the back of research published by HMRC in May that suggested the government was exploring reducing the tax and national insurance advantages by changing pension contribution schemes for workers. While the research was commissioned by the Conservative government in 2023, the timing of its publication raised eyebrows because of it's proximity to Rachel Reeves's spending review on 11 June. The spending review is when Reeves will lay out all government departments' budgets for the coming years. It could also be a strong indication as to whether the government will need to announce any increase to taxes later this year in the autumn statement. Experts have told Yahoo News why the prospect of targeting salary sacrifice schemes would be so appealing for the government - and who would most likely miss out. A salary sacrifice scheme is a formal agreement between an employee and employer in which the employee agrees to reduce their gross salary in exchange for a non-cash benefit - like a bicycle through the Cycle to Work scheme - provided by the employer. In turn, as the employee pays for this through their salary, they not only pay less income tax, but their employer pays lower national insurance (NI) on the person's remaining take home-pay. As national insurance is one of the main revenue streams for the government, this means that when an employee enrols in a scheme, the Treasury misses out on the extra tax. When you use salary sacrifice for your pension, you agree to take a lower salary, and your employer pays the 'sacrificed' amount directly into your pension. Like with any other salary sacrifice, because your official salary is lower, both you and your employer pay less in NI, and you pay less income tax on your earnings. Salary sacrifice schemes are very popular, with 70% of UK pension schemes using them as the default method for contributions. If the salary sacrifice scheme was limited or cut for pensions, the government could remove or limit these tax and NI savings. For example, you and your employer might have to pay NI on the amount you sacrifice, or there could be a cap on how much salary can be sacrificed before the benefits are lost. "Salary sacrifice along with income tax relief makes it very attractive to save into a pension," Stuart Price, Partner and Actuary at Quantum Advisory told Yahoo News. "For a lower rate tax payer £1 invested only costs them 72p, and for a high rate tax payer £1 invested only costs them 58p. "If the provision of salary sacrifice is removed and hence national insurance relief is no longer provided these numbers increase to 80p for a lower rate tax payer and 60p for a higher rate tax payer," he added. By removing or scaling back the tax and National Insurance (NI) exemptions that benefit employees and employers benefit from through salary sacrifice, the government could boost its revenue. 'Salary sacrifice along with the annual allowance often appear top of the list of options when the government needs to save money," Helen Morrissey, head of retirement analysis at Hargreaves Lansdown told Yahoo News. The move would therefore be an attractive prospect for HMRC because it would generate "significant income". "I would expect that they would be in favour of the removal of salary sacrifice on pensions," John Mullaly, a group risk and healthcare consultant from actuary Cartwright Employment Awards, told Yahoo News. This may be even more significant as the government is just days away from its spending review, the process the government uses to set all departments' budgets for future years. 'The government may be tempted to turn its eye to salary sacrifice... particularly given the amount it costs in lost national insurance revenue," Martin Willis, a partner at independent consultancy Barnett Waddingham explained to Yahoo News. While the government might benefit, employees earning the least would be the hardest hit. "High earners may be insulated from any potential shift; the real impact would be on lower and moderate earners - particularly those using salary sacrifice to top up pension contributions," Waddingham said. The move could also be an additional blow for businesses after the government's hike on national insurance rates for employers in the last Budget. "Removing it now could disproportionately affect basic rate taxpayers and employers who've only just faced a rise in national insurance costs," Willis added. Morrissey echoes this. "At a time when employers are battling higher wage and NI bills, salary sacrifice might be seen as one way of reducing these costs – making changes will add an extra burden to struggling employers.' While both employees and employers benefit from salary sacrifice arrangements, Mullaly said employers "do not pocket all of the savings." "Quite often they use it to fund additional benefits to be used to attract and retain employees," he added. Additionally, if salary sacrifices adversely affect pension pots, savers could be discouraged from putting away enough into their pension — which is unwelcome news when the figure for a comfortable retirement continues to rise. According to the Pensions and Lifetime Savings Association (PLSA), to live a comfortable retirement in the UK, the estimated annual retirement income needed in 2025 is around £43,100 a year. "There does seem to be a trend of focusing on increasing tax revenue at the expense of all other considerations, rather than focusing on the underlying social reasons for having things like a pension," Price said. "The result of all of this is less money will be saved by employees towards their pension. Not a great thing when as a nation we are nowhere near saving enough for our retirement." Added to this, the change in uptake could affect how and where pension funds invest their money. "Many of the largest pension funds invest in our high streets, shopping centres and other real estate," Mullaly explained. "With many high streets already under threat, any reduction in investment is only going to make the situation in this area worse." While salary sacrifice reduction may be a highly attractive prospect for the government, it is clear that it would be far from popular. The Society of Pension Professionals has already warned the government against salary sacrifice changes, writing in a statement that it would affect earners "very selectively". Added to this, there would be some serious logistical hurdles to tackle to implement it. Firstly, Willis said implementing these reforms after the new financial year has started "would likely be far from straightforward". "Currently, salary sacrifice reward structures are set by employers, so implementing changes could be very messy, especially when it comes to capturing salary decisions for new hires or changes mid-year," he told Yahoo News. "Today salary sacrifice is largely used to support improved pension saving, and is limited since the system was already tightened in 2017." A government spokesperson said: 'These claims are totally speculative. HMRC regularly commissions independent research on all aspects of the tax system, and this research was commissioned under the previous government. 'We are committed to keeping taxes for working people as low as possible which is why, at last autumn's Budget, we protected working people's payslips and kept our promise to not raise the basic, higher or additional rates of income tax, employee national insurance or VAT."
Yahoo
2 days ago
- Yahoo
Two private schools close in wake of Labour's VAT raid
Two prep schools have become the latest victims of Labour's VAT raid by announcing their closures as a result of the levy. Park Hill School in Kingston, Surrey, said the introduction of the 20pc tax on fees in January had led to a decline in pupil numbers meaning it was no longer financially viable to operate. Falcons School, a neighbouring school in Putney, south-west London, said a raft of tax changes including the VAT levy and increases to National Insurance alongside a higher minimum wage had 'intensified' a decline in pupil enrolment forcing it to close at the end of the academic year. It comes after figures this week revealed private school pupil numbers had fallen by more than 11,000 in England following the VAT raid on fees – four times more than government forecasts. There were around 582,500 pupils at English private schools in January compared to 593,500 at the same point last year, according to the Department for Education. Parents at Park Hill were told this week the 75-year-old school would be forced to close with children offered the opportunity to move to a nearby sister school. The decision came as a shock to many, with the school's website this week still advertising a recent open day for prospective pupils. The school had also written to parents in March to thank them for 'continued loyalty and support' in spite of the introduction of VAT and offered a 5pc discount to families who paid the following year's school fees early. However, on Wednesday, in a letter seen by The Telegraph, Amit Mehta, chief executive of Inspired Learning Group, which owns the school, said: 'Following careful reflection, we have made the strategic decision to relocate pupils from Park Hill to join our sister school, Westbury House, from January 2026. 'We are incredibly proud of everything Park Hill has achieved over the years. However, like many schools, it also faces challenges, and this evolution offers fresh opportunities for all our pupils.' Park Hill, which has 84 pupils aged between two and 11, will transition into a fully-fledged nursery which is exempt from VAT. Justin Spanswick, chief operating officer at Inspired Learning Group, said: 'The decision was made because of the downward trend in pupil numbers at Park Hill, due in part to the introduction of VAT on school fees.' He added the decision would also strengthen Westbury House 'in the current climate', with pupils moving to the school helping to shield it from the Government's tax rises. Falcons School decided to absorb the 20pc VAT levy in January and kept fees frozen at £6,270 per term in a bid to arrest a decline in pupil numbers. In March the school told the families of its 126 pupils that it was 'considering the future viability' of the school and that it was 'likely to close'. The school was taken over by Inspired Education Group in 2023 and made the decision to admit boys for the first time in an attempt to increase pupil numbers. A spokesman for the school said: 'As a result of the thorough consultation process, we have taken the difficult decision to close the school at the end of the academic year. 'The consultation took place as the school has been loss-making since we acquired it, with enrolment under 50pc over the last two years. THis has been intensified by the recent government changes such as VAT.' Ministers have admitted the Government expects 100 private schools to close as a result of its VAT raid. Analysis by the Independent Schools Council suggests this will lead to 40,000 pupils being displaced and 11,000 jobs being lost. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
