Warning Signs for the Future: Pensions, Finance Bill, and Small Business Struggles
Enews – 25 July 2025
In this week’s Enews, we take a look at the Department for Work and Pensions’ (DWP’s) warning that futurepensioners will be ‘worse off’, and the publication of draft legislation for Finance Bill 2025-26. There is also research carried out by the Federation of Small Businesses (FSB) that suggests that more small firms expect to shrink than grow to update you on.
Pensioners ‘set to be worse off’, warns DWP
Government publishes Finance Bill supporting documents
More small firms expect to shrink than grow
Pensioners ‘set to be worse off’, warns DWP
The Department for Work and Pensions (DWP) has warned that pensioners retiring in 2050 are set to be worse off than those retiring today.
According to the DWP, nearly half of working-age adults in the UK are not saving into a private pension. More than three million self-employed workers do not currently save into a pension, it added.
Just one in four low earners are saving into a private pension, the DWP also found. The DWP warned that actionneeds to be taken to boost retirement savings.
In order to tackle the issue, the DWP is utilising the Pensions Commission and has initiated the next review ofthe State Pension age. This is currently 66 years old and will rise to 68 by 2046.
Paul Nowak, General Secretary of the Trades Union Congress (TUC), said:
‘Everyone deserves dignity and security in retirement, but right now many workers – especially those in the private sector – will find themselves without enough to get by on.
‘Far too many people won’t have enough pension for a decent retirement, and too many – especially women, BME, disabled workers and the self-employed – are shut out of the workplace pension system altogether.’
Internet link: GOV.UK
Government publishes Finance Bill supporting documents
The government recently published draft legislation for Finance Bill 2025-26 for consultation.
The legislation includes an Inheritance Tax overhaul; measures intended to refine and simplify the Making TaxDigital for Income Tax (MTD for IT) and penalty reform regimes; tax adviser regulation; and changes to thetreatment of carried interest.
Most measures included in the draft Finance Bill comprise a tax information and impact note (TIIN), which sets out what the policy seeks to achieve, and a summary of the expected impacts; draft legislation; and an explanatory note which provides a more detailed guide to the legislation.
The consultation closes on 15 September 2025. The final contents of the next Finance Bill will be decided byChancellor Rachel Reeves.
Internet link: GOV.UK
More small firms expect to shrink than grow
The proportion of small firms expecting to contract, sell or close outnumbered the percentage hoping to grow, the Federation of Small Businesses (FSB) has warned.
The share of small businesses who said they expected their business to shrink or close, or to sell up the business over the next 12 months was 27%. This outweighed the 25% who predicted their business would expand in the second quarter of this year.
It is the first time in the history of the Small Business Index (SBI) from the FSB that the proportion of small firms bracing for contraction, sale or closure outnumbered the percentage hoping to grow.
The FSB says that the gloomy finding likely reflects small business sentiment around the introduction of higher levels of employer National Insurance contributions and rises in the National Living Wage.
It also reflects fears around the impending Employment Rights Bill, which the FSB says looks set to impose a new raft of costs and risks onto the shoulders of small employers.
Tina McKenzie, the FSB’s Policy Chair, said:
‘Confidence being so low and not showing any improvement since the start of the year, is bad enough.
‘But add in the fact that stagnation and pessimism among small businesses spells huge risk for the overall economy, and the upcoming Small Business Strategy needs to be ambitious enough to meet the scale of the challenge facing the UK’s small firms.’
Internet link: FSB website
