State pension likely to rise by 4.7% in April! Temu’s UK operation doubles revenues and pre-tax profit! Reeves plots ‘taxi tax’ as borrowing costs soar
- TBA
- Sep 22
- 5 min read
Updated: Sep 23
UK state pension likely to rise by 4.7% in April
According to the latest wage data, the UK State Pension is expected to rise by 4.7% in April 2026, which could mean an annual increase of more than £500 for those receiving the new State Pension.
Under the current “triple lock” policy, the State Pension increases each year by whichever is highest: 2.5%, the inflation rate (forecast at 4% this September), or the average wage growth. Latest data from the Office for National Statistics (ONS) shows that in the three months to July, average wages including bonuses rose by 4.7%. This figure is likely to serve as the basis for the annual pension increase.
If pensions rise by 4.7%:
New State Pension (for those reaching pension age after April 2016): expected to increase to £241.05 per week, equal to £12,534.60 per year, up by £561.60.
Basic State Pension (for those who reached pension age before April 2016): expected to increase to £184.75 per week, equal to £9,607 per year, up by £431.60.
Around 13 million people in the UK receive the State Pension. Former pensions minister and LCP partner Sir Steve Webb noted that by 2027, those relying solely on the new State Pension will for the first time fall into the income tax net. “Currently, nearly three-quarters of pensioners already pay income tax. With the tax-free allowance frozen and pensions continuing to rise, more older people will be drawn into the tax system.”
The State Pension is the second-largest item of government expenditure after healthcare. The “triple lock” was introduced in 2011 by the Conservative–Liberal Democrat coalition to ensure pensions would not fall behind living costs or wages. However, its long-term cost has been a subject of debate.
Chancellor Rachel Reeves has pledged that the Labour government will retain the “triple lock” throughout this parliament. Government forecasts suggest that by the end of the term, the State Pension will rise by about £1,900 annually. For many retirees, the State Pension is just one source of income, supplemented by occupational or private pensions.
Meanwhile, ONS data also shows that regular wage growth (excluding bonuses) slowed to 4.8% in the three months to July, the lowest since May 2022. KPMG’s chief economist Yael Selfin expects wage growth to keep falling over the next year, potentially dropping below 4% by year-end due to weak economic activity and higher labour costs for businesses.
The ONS also reported that the UK unemployment rate rose to 4.7% in the three months to July, the highest since May 2020. During the same period, job vacancies fell by 10,000, and payroll employment dropped by 8,000 in August.
Temu’s UK operation doubles revenues and pre-tax profits
Chinese e-commerce platform Temu recorded rapid growth in the UK last year, with both revenue and pre-tax profit almost doubling thanks to its pricing advantage. According to its latest filings, Temu’s UK division generated $63.3 million in 2024, nearly double the $32 million recorded in 2023. Pre-tax profit rose from $2 million to $3.9 million.
Because of its relatively small profit size, Temu’s UK corporate income tax payment in 2024 was $985,000, up from $517,000 in 2023. The company stated that its UK revenue is defined as “service fees,” similar to Amazon UK and Google UK, generated primarily by providing corporate support services to affiliated companies.
Despite its rapid expansion, Temu, along with Chinese fast-fashion platform Shein and US giant Amazon, may face pressure to raise prices. In April, the UK government announced a review of the rule exempting parcels worth less than £135 from customs duties. UK retailers argue this gives Temu and Shein an unfair advantage in cross-border trade.
Similarly, the US abolished its $800 de minimis import exemption on August 29. The EU is also considering scrapping its €150 exemption threshold and may introduce per-parcel handling fees to stem the inflow of cheap goods and fund additional customs checks.
Reeves plots ‘taxi tax’ as borrowing costs soar
According to industry sources, Chancellor Rachel Reeves is preparing to announce an increase in VAT on taxi journeys in the Autumn Budget, a move expected to raise about £750 million annually for the Treasury.
Activists have dubbed this the “taxi tax,” which is likely to be officially unveiled in the November 26 Budget to help plug a £50 billion hole in public finances. Data shows that between April and August, UK public borrowing exceeded official forecasts by £11.4 billion, the highest outside the pandemic period.
Industry insiders note that imposing a 20% VAT uniformly on all taxi and ride-hailing trips would increase travel costs outside London, hitting suburban residents who rely on taxis the hardest.
Currently, taxi firms outside London do not have to charge VAT on journeys, as most drivers are self-employed contractors with annual incomes below the £90,000 VAT threshold. Ride-hailing platform Uber previously brought a legal challenge over VAT, initially winning a ruling that required other companies to pay. But last year, the Court of Appeal overturned the decision, and in July 2024 the Supreme Court upheld that outcome.
The Treasury has said it is still considering the possibility of a uniform VAT policy. Financial Secretary to the Treasury Dan Tomlinson stated earlier this month: “The government takes this complex issue very seriously and recognises the need for businesses to have policy certainty. We are carefully considering the wide range of views raised in last year’s consultation and will publish a detailed response soon.”
Industry insiders added that they have been informed Reeves plans to announce a 20% VAT rate on taxi rides in the Budget. The Treasury has also repeatedly said that decisions on tax policy are normally announced as part of major fiscal events such as the Budget.
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