Business

Britain is heading towards a demographic tipping point, with pensioners set to make up more than a quarter of the adult population by 2075, according to an official review into the state pension age.

Suzy Morrissey, the independent reviewer appointed to examine the long-term sustainability of the state pension, said the number of people of pensionable age or older would rise by 55 per cent over the next half-century, reaching 19.5 million. The number of over-85s is forecast to nearly triple, from 1.8 million today to 5.1 million.

The report highlights the fiscal strain of an ageing population. The proportion of adults above the state pension age is projected to climb from 22 per cent to 28 per cent of over-16s, while the annual cost of the state pension is expected to rise from about 5 per cent of GDP to 7.7 per cent by the early 2070s.

The state pension age, currently 66, is already set to increase to 67 between 2026 and 2028 and to 68 by 2046. Previous governments floated the idea of accelerating the timetable but pulled back amid fears of a voter backlash. Morrissey’s review will consider whether linking the pension age to life expectancy could ensure “fairness between generations” while easing the burden on the Treasury.

Sir Steve Webb, a former pensions minister and now a partner at consultancy LCP, said further rises would be politically fraught. “In the UK, changes to state pension ages have become highly politically sensitive, and this is likely to lead the new government to be cautious about further major changes,” he said. “A much more aggressive timetable for moving to 68, or a timetable for making younger workers work to 69 or 70, seems unlikely.”

One government source dismissed the prospect outright, warning that raising the pension age would amount to “electoral suicide”.

At the same time, ministers have launched a new pensions commission amid concerns that today’s workers face a greater risk of poverty in retirement than their parents. Analysis by the Department for Work and Pensions suggests that 15 million people are not saving enough, with nearly half of working-age adults putting nothing aside. The problem is particularly acute among the self-employed, the low-paid and some ethnic minority groups.

Around three million self-employed workers are saving nothing for retirement, while just a quarter of low-paid private sector staff contribute to a pension. The same proportion of Pakistani and Bangladeshi workers are saving, raising fears of widening inequalities. Women also face a significant pensions gap, with those approaching retirement expected to draw barely half the income of men.

The commission’s review comes against the backdrop of predictions that those retiring in 2050 will receive around £800 a year less than today’s pensioners, even as longevity rises.

The automatic enrolment scheme, introduced after a 2005 pensions commission, has helped lift participation rates — with 88 per cent of eligible employees now saving into a workplace pension, up from 55 per cent in 2012. But experts warn that without higher contributions and broader inclusion, Britain risks a looming retirement crisis.

For Rachel Reeves, who faces pressure to plug a hole in the public finances, the dilemma is acute. Reforms that could make the system more affordable in the long term carry high political costs today — and offer little near-term fiscal reward.

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Pensioners to make up a quarter of Britain’s adults by 2075, review warns

A majority of Britain’s millionaires believe they would enjoy a better quality of life overseas, as higher taxes and the rising cost of living fuel unease among the wealthy.

A survey of 1,000 people with a net worth of at least £1 million found that 60 per cent thought life would be better abroad, while just over half said they would be more likely to leave if Chancellor Rachel Reeves pressed ahead with a wealth tax.

The research, commissioned by the migration consultancy Arton Capital, highlights what it called a “tipping point” for the UK’s wealthy elite.

Armand Arton, the firm’s chief executive, said: “The uncertainty around the government’s proposed wealth tax mirrors the ongoing economic uncertainty seen around the world. The longer unpredictability persists, the greater the risk of losing capital, talent and long-term investment to countries that offer greater security.”

Concerns among the wealthy have intensified since Reeves scrapped the “non-dom” regime in April, a longstanding arrangement that allowed foreign residents to shield overseas earnings from UK tax.

The Office for Budget Responsibility has forecast that up to a quarter of non-doms may leave the country as a result, though early payroll data suggests departures have so far been in line with or below those predictions.

The survey — conducted by research firm Walr between 31 July and 8 August — found 53 per cent of respondents already feel less wealthy due to the rising cost of living. Six in ten said their quality of life would be somewhat (31 per cent) or significantly (29 per cent) better in another country.

When asked where they might relocate, 35 per cent cited the United States, 33 per cent Canada and 25 per cent Australia. The UAE, with its zero income tax regime, ranked fourth at 17 per cent.

Despite concerns about tax policy, two-thirds (67 per cent) of millionaires surveyed still see the UK as an attractive place to invest, citing its role as a global financial hub. More than four in five (81 per cent) also said they continue to feel wealthy despite the higher tax burden.

Arton said this showed there was still resilience in Britain’s reputation: “It’s not all bad news. While the cost of living continues to rise, and many of the wealthy are being tempted by the quality of life on offer elsewhere, the majority of those we surveyed still feel wealthy. Whether they will still feel secure after a potential tax hike remains to be seen.”

Reeves has promised that ending the non-dom regime and closing tax loopholes will help fund an additional 40,000 NHS appointments a week. But analysts warn that the Treasury still faces a projected £50 billion shortfall, according to the National Institute of Economic and Social Research. That has led to speculation about wider tax reforms, including changes to capital gains tax and inheritance rules.

The findings will add to pressure on ministers to reassure high-net-worth individuals that Britain remains a competitive place to live as well as invest, amid mounting evidence that the global race to attract wealthy residents is intensifying.

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Most UK millionaires think they’d be better off abroad

The UK is rejecting record numbers of visa applications, raising fears that tightening immigration rules could choke off the flow of international talent needed by British businesses.

Fresh analysis of Home Office data by immigration consultancy Immpact shows that more than 664,000 applications for work, student, family and visitor visas were turned down in the 12 months to September 2024. Within that, workers from India, Pakistan, Nigeria, Ghana and Zimbabwe faced the highest number of refusals, while applicants from Bangladesh, Ghana, Pakistan, Nigeria and Kenya had the lowest success rates statistically for work visas.

India topped the table with more than 10,500 rejections, while France — the only European country in the top 20 — saw just 42 refusals out of 5,378 applications, underlining the uneven treatment between neighbouring states and those further afield.

The figures come as businesses across sectors from healthcare to technology warn of mounting labour shortages. Employers argue that Britain’s rigid visa system, combined with higher salary thresholds, is making it harder to recruit overseas staff at a time when domestic unemployment is rising and skills gaps are widening.

Jonathan Beech, managing director of Immpact, said the rise in refusals reflected a deliberate tightening by the government. “The most common reasons for refusals, regardless of nationality, include insufficient funds, inaccurate or misleading information, lack of genuine ties to the home country, criminal records, and documentation issues,” he said. But he warned that the complexity of the system was catching out genuine applicants: “Around 70 per cent of applicants still handle their own submissions, and that leaves many exposed to rejection.”

Immpact estimates the Home Office retained £125 million in fees from refused applications over the period, raising concerns that the system is generating revenue from unsuccessful bids while leaving employers without much-needed staff.

The pattern of rejections is also shifting. Alongside the traditional high-volume markets of India, China and the US, applications from Central Asian states such as Kyrgyzstan, Uzbekistan and Kazakhstan featured prominently, reflecting a widening pool of workers seeking opportunities in Britain.

For UK business leaders, however, the concern is less about where applicants are coming from and more about the cumulative effect of rejections on productivity. The Confederation of British Industry has repeatedly warned that without a steady inflow of skilled workers, Britain’s growth plans risk stalling. The NHS, too, has relied heavily on overseas recruitment to fill staffing gaps, with shortages in social care and hospitality worsening the pressure.

The government insists tighter rules are necessary to manage migration levels and safeguard the integrity of the visa system. But critics argue that the economic cost is mounting. “By reducing the available labour pool at a time of domestic shortages, we risk damaging growth and undermining Britain’s competitiveness,” said one senior business leader.

The data underline a broader shift in immigration policy under Labour, which has sought to present a tougher line amid political pressure on migration. Yet with record numbers of employers already citing staffing shortages as a key business risk, there are growing calls for Reeves and her colleagues to balance control with pragmatism.

As Beech put it: “The Chancellor talks about firing up Britain’s productivity, but unless access to talent is made easier, we will continue to see businesses struggling to fill roles — and the economy will pay the price.”

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Visa refusals rise as UK risks losing global talent

Traders brace for inflation data and public finance update as long-term government debt hits levels last seen in 1998

Government borrowing costs climbed sharply on Monday, with the interest rate on 30-year UK gilts rising to levels not seen in nearly three decades.

The yield on 30-year bonds — which moves inversely to prices — rose 0.05 percentage points to 5.61 per cent, bringing it close to the 27-year high last reached in May 1998. That means the UK is now paying almost a full percentage point more than during the market turmoil of October 2022, when Liz Truss’s mini-budget crisis pushed yields to 4.78 per cent.

Benchmark 10-year gilt yields also ticked higher, up 0.05 percentage points to 4.74 per cent.

The moves reflect mounting unease over Britain’s public finances and the persistence of inflation, which investors fear could limit the Bank of England’s room to cut interest rates further this year. Traders have largely priced out the prospect of additional reductions following the quarter-point cut to 4 per cent on 7 August.

Markets will be watching closely on Wednesday when the latest consumer prices index figures are released. Inflation is expected to edge up from 3.6 per cent in June to 3.7–3.8 per cent in July. Public finance data due on Thursday will add to the pressure, with any disappointment likely to reinforce expectations that the Chancellor, Rachel Reeves, may need to announce further tax rises in the autumn budget.

Simon French, chief economist at Panmure Liberum, said there was no single trigger for the latest gilt sell-off, but structural changes were at play. “The gradual closure of defined benefit pension schemes, traditionally one of the largest buyers of long-dated gilts, continues to reduce demand,” he noted.

The spike in long-term borrowing costs is less damaging than in past cycles, economists say, because the Debt Management Office has shifted issuance towards shorter-dated maturities, reducing reliance on 30-year debt.

Even so, the divergence with Europe highlights the pressure on UK markets. The yield on Germany’s 30-year Bund slipped 0.01 percentage points to 3.33 per cent, though it remains near a 14-year high.

The last time UK long-dated gilt yields reached current levels was in 1998, the year Geri Halliwell left the Spice Girls. For investors, the return to such heights signals a decisive break from the ultra-low borrowing era of the 2010s and underlines the scale of the fiscal and monetary challenges facing Reeves as she prepares her first full budget.

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Borrowing costs rise again as gilt yields hit near 27-year high

Reports suggest stamp duty may be replaced with a levy on homes worth more than £500,000, with London and South East owners hit hardest

Homeowners could face an annual property tax on homes worth more than £500,000 under radical Treasury plans to replace stamp duty, according to reports.

The autumn budget could include proposals for a proportional property tax, shifting the burden from one-off stamp duty charges to an ongoing annual levy. The move is being considered as Chancellor Rachel Reeves searches for ways to raise revenue and boost the efficiency of the housing market.

Stamp duty currently raises around £13.8 billion a year for the Treasury, but has long been criticised for discouraging people from moving. It applies at rates from 2 per cent on homes worth over £125,000, through to 12 per cent on the portion above £1.5 million.

According to proposals drawn up by the centre-right think tank Onward, households would pay 0.54 per cent annually on the value above £500,000, while properties worth more than £1 million would pay 0.81 per cent on the portion above that threshold.

Professor Tim Leunig of the London School of Economics, who first outlined the model, argued: “Stamp duty raises transaction costs, preventing people from moving for new job opportunities and undermining growth. The way Britain taxes households is both impractical and unfair.”

Onward suggested the new tax would not be applied retrospectively but only on properties bought after it was introduced. The 5 per cent surcharge on second homes would remain, with no additional annual levy for those buyers.

Separately, Leunig proposed scrapping council tax and replacing it with a local authority levy of 0.44 per cent on property values between £80,000 and £500,000 (capped at £2,196 annually). Someone with a £650,000 home, for instance, would pay £3,006 each year in combined council and property tax.

Analysts say the shift would likely reduce costs for the majority of homeowners, particularly outside London and the South East, but increase annual bills for owners of higher-value homes in wealthier areas.

Research by Hamptons shows London and South East properties would bear the brunt, as prices there have risen most sharply since council tax bands were last set in 1991.

The campaign group Fairer Share, which supports replacing stamp duty and council tax with a flat property levy, said the reported Treasury plans were a “step in the right direction”. Andrew Dixon, its founder, said:

“Removing stamp duty would lead to a more effective use of housing, making it easier for families to upsize or downsize. A modern property tax system would better reflect today’s real property values and spread the burden more fairly.”

Surveys suggest many older homeowners would consider moving if stamp duty were abolished. A Jackson-Stops poll found that 41 per cent of over-55s would downsize within two years if the tax were reduced or scrapped.

The Chancellor faces a £6.5 billion shortfall in the public finances, making property taxation reform a politically tempting lever. However, experts warn such a shake-up would be highly complex and could take more than one parliament to implement.

David Fell of Hamptons said the impact would “depend on how closely the government follows any recommendations” but noted it would likely cut upfront costs for expensive purchases while raising ongoing ownership costs.

For now, the Treasury has declined to comment, saying it does not respond to speculation ahead of the budget.

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Homeowners could face annual property tax under Treasury plans to replace stamp duty

Savills estimates extra storage space the size of 400 football pitches will be needed by 2032 as defence spending surge strains logistics capacity

Britain will need to build hundreds of new warehouses over the next seven years to cope with a surge in demand from the defence sector, analysts have warned.

Property consultancy Savills estimates that an extra three million sq m of warehouse space — the equivalent of more than 400 football pitches — will be required by 2032 as the government’s defence spending commitments feed through to manufacturers.

The warning follows Sir Keir Starmer’s pledge this summer to increase the UK’s annual defence budget by around £40 billion by 2035, in what he described as an “era of radical uncertainty”.

Much of this new spending is expected to flow to Britain’s largest defence contractors, including BAE Systems and Rolls-Royce, who will need additional production and storage capacity to fulfil orders both at home and from allies across Europe.

If Savills’ forecasts prove correct, the UK will need to build about 429,000 sq m of new storage capacity each year until 2032. That would be on top of the 650,000 sq m average delivered annually by developers over the past decade, excluding two post-pandemic years of exceptional output.

The surge in demand from the defence industry comes at a time when warehouse rents are already under pressure. Prime rents for logistics hubs near the M25 have almost doubled since 2019, climbing from £215 per sq m to £398 per sq m today.

Andrew Blennerhassett, associate director in Savills’ industrial and logistics research team, said: “If there is a lesson to be learnt from the pandemic, it is that well-functioning, diversified and robust national logistics ecosystems are vital to a functioning manufacturing industry – and defence is no exception. Policymakers will need to ensure land availability keeps pace with the expansion required.”

The pandemic and subsequent supply chain disruption prompted many companies to reshore production and expand domestic storage capacity, adding further strain to the UK logistics market. However, new development has been hampered by rising construction and financing costs.

Warehouse developers and landlords are already positioning themselves to benefit from the defence spending drive. Sirius Real Estate, which owns more than £2 billion of warehouse assets in the UK and Germany, has appointed a former British Army major general as a strategic adviser to capture new opportunities.

Andrew Coombs, chief executive of Sirius and a former Grenadier Guards officer, said: “Defence has the potential to become a major growth sector and driver of demand for warehouse and manufacturing space, where the rent is ultimately government derived.”

Analysts warn that if land availability and planning approvals fail to keep up, the combination of e-commerce demand, reshoring strategies and defence spending could push logistics rents even higher, adding to costs across multiple industries.

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Britain warned it must build hundreds of new warehouses to meet defence pledge

Soho House, the exclusive members’ club chain that has become synonymous with celebrity culture and creative-class networking, is to return to private ownership in a $2.7bn (£2bn) deal, just four years after its high-profile listing on the New York Stock Exchange.

The move comes after a volatile spell as a public company, during which its share price halved, investors questioned its accounting methods, and the business struggled to balance rapid global expansion with the exclusivity demanded by its more than 213,000 members worldwide.

The deal will see MCR Hotels, the third-largest hotel operator in the United States, lead a group of new equity investors. Actor and tech investor Ashton Kutcher, long rumoured to be a member, will join the board, while MCR’s chief executive Tyler Morse will serve as vice-chair.

Existing major backers will remain in place, including Ron Burkle, the US retail billionaire who holds a 40% stake, restaurateur Richard Caring with 21%, and Goldman Sachs, which has 8%. Founder Nick Jones (pictured), who opened the first Soho House in London’s Greek Street in 1995, retains his 5%.

New investors will buy shares at $9 apiece, an 83% premium on the price before takeover interest surfaced late last year. However, that still values Soho House below the $2.8bn peak it briefly reached in 2021. The $2.7bn enterprise value includes about $700m of debt.

When Soho House listed in 2021 under the name Membership Collective Group, it was pitched as a lifestyle stock for the Instagram age: a global network of clubs, hotels and restaurants with celebrity cachet and aspirational branding.

At its height, the company boasted revenues doubling in three years, rapid openings from Mumbai to Los Angeles, and waiting lists thousands strong. But the gloss faded quickly.

Shares slid from above $14 in August 2021 to $7.64 by last week, reflecting investor unease with its hefty losses — totalling $739m across its four years on the market — and the inherent contradiction of chasing rapid global growth while selling exclusivity.

Criticism also came from activist investors. Hedge fund Third Point, run by billionaire Dan Loeb, had urged Soho House to court fresh investors and even consider a competitive bidding process. Short-sellers such as GlassHouse Research raised questions about the company’s accounting, though these were rejected.

Chief executive Andrew Carnie said returning to private ownership would give Soho House the breathing space to pursue its expansion strategy without the quarterly scrutiny of Wall Street.

“Returning to private ownership enables us to build on this momentum, with the support of world-class hospitality and investment partners,” he said. “I’m incredibly proud of what our teams have accomplished and am excited about our future, as we continue to be guided by our members and grounded in the spirit that makes Soho House so special.”

Carnie has sought to make the company leaner in recent years. Management argues that operational efficiencies have improved profitability, with Soho House reporting three consecutive quarters of net profit.

For MCR Hotels, best known for assets such as New York’s TWA Hotel at JFK and the High Line Hotel, the deal provides a gateway into the lucrative high-end lifestyle sector. The group is also investing heavily in the UK, having acquired the BT Tower in London last year for £275m with plans to convert it into a hotel.

Ashton Kutcher’s appointment to the board reflects Soho House’s desire to blend cultural cachet with strategic investment nous. Kutcher has a track record in backing technology startups, from Uber to Airbnb, and is likely to bring both media attention and Silicon Valley credibility.

For a business that has long relied on its star-studded clientele — from Kate Moss and Kendall Jenner to the Duke and Duchess of Sussex, who had their first date at the Dean Street house — his arrival may also help bolster Soho House’s brand positioning as both aspirational and innovative.

The club now has 48 locations open or in development worldwide, with 10 in London alone. Annual fees range from £1,000 to £2,920, depending on access levels. But expansion at this pace has posed challenges: long-time members complain about overcrowding and a dilution of exclusivity, while rising fees risk pricing out younger creatives.

The deal is unlikely to alter the member experience in the short term. However, the backing of MCR Hotels could accelerate property development, with new sites expected across Europe, Asia and the US.

For investors, the transaction closes a turbulent chapter in Soho House’s history as a listed company. While the public markets struggled to value its hybrid model of hospitality, lifestyle, and membership, the private equity consortium appears to be betting on its ability to scale profitably away from Wall Street scrutiny.

The question is whether Soho House can retain its aura of exclusivity while expanding further into new cities and markets — or whether its greatest asset, its brand mystique, risks dilution in the pursuit of growth.

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Soho House to go private in $2.7bn deal as Ashton Kutcher joins board

Wider access to weight-loss injections on the NHS could deliver significant economic gains by cutting sick days and easing the burden of obesity-related illness, new research suggests.

A study of 421 NHS patients using the latest generation of obesity drugs found the number of sick days taken fell by a third within three months of starting treatment. Combined sick leave dropped from 517 days in the three months before starting the jabs to 334 days after three months of use, according to data from Oviva, the UK’s largest provider of weight-loss support services.

After six months, 77 per cent of patients reported taking no sick leave at all — up from 63 per cent before starting treatment.

The findings highlight the potential economic impact of rolling out obesity injections more widely. Government figures show UK workers took 149 million sick days in 2024, down from a pandemic-era peak but still nearly 10 million more than pre-2020 levels.

Health Secretary Wes Streeting has previously described obesity as a key drag on the workforce, with people living with obesity taking “an extra four sick days a year on average” and many leaving employment altogether.

“These drugs could have colossal clout in our fight to tackle obesity and get unemployed Britons back to work,” Mr Streeting has argued, backing the medicines as a tool for reducing economic inactivity.

Government modelling suggests that a widespread rollout could save the taxpayer £5bn annually through productivity gains and lower healthcare costs. Obesity is estimated to cost the UK economy around £98bn a year, including £15bn in lost productivity and £19bn in direct NHS spending.

Despite political enthusiasm, the rollout of jabs such as Mounjaro, made by Eli Lilly, has been slow. At the end of June, 32,000 patients were still waiting for an NHS weight management appointment, while only 1 per cent of eligible patients currently receive treatment, according to Oviva.

A quarter of a million people across England are expected to be prescribed Mounjaro on the NHS over the next three years, but demand is already outstripping supply.

Martin Fidock, UK chief of Oviva, urged ministers to accelerate distribution: “The Chancellor talks about firing up Britain’s productivity but doesn’t address the millions who are locked out of work by poor health. People living with obesity are twice as likely to be off sick, yet Britain’s postcode lottery for healthcare means just a fraction of patients get access to treatment.”

The average patient in Oviva’s study was 49 years old — an age group where obesity typically peaks and comorbidities such as anxiety, depression and hypertension are common. Alongside the reduction in sick days, many patients reported lifestyle changes, including drinking more water and eating vegetables more regularly.

Research has also linked the new generation of weight-loss treatments to broader health benefits, including halving the risk of death from cardiovascular disease and reducing cancer risks.

Earlier this year, the Tony Blair Institute suggested weight-loss jabs could be offered to half of all UK adults as part of a national obesity strategy. However, if all 26 million Britons with a BMI of 27 or above were prescribed the drugs, the annual bill would be about £38bn — around 17% of total NHS spending.

The debate now facing policymakers is whether the productivity gains and reduced healthcare costs outweigh the upfront price of scaling up access.

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Weight-loss jabs could slash UK sick days and boost productivity, study finds

Think of your favourite brands. What makes them memorable? Why do people keep coming back? The same principles that companies use to position their products and services can be applied to individuals — a process now widely known as personal branding.

Harvard Business School lecturer Jill Avery describes it simply: “Every time we apply for a job, pitch to a client, or vie for a promotion, we are marketing ourselves. Personal branding is about understanding how to communicate our own value proposition — the difference we want to make in the world.”

What is personal branding?

At its heart, personal branding is the deliberate act of shaping how people see you. It’s about defining and communicating your unique value in a way that is accurate, coherent, compelling, and differentiated.

If you don’t take control of that narrative, others will do it for you — and their assumptions may not reflect the qualities you want to project. Done well, personal branding ensures you are remembered for the right reasons and stand out in a crowded professional landscape.

Why does it matter?

Reputation is currency. By consistently demonstrating your values, skills, and passions, you can attract opportunities that align with your authentic self.

A strong personal brand can:

• Draw attention to your unique differentiators, helping you win jobs, projects, or clients.
• Connect you with communities and peers who share your interests.
• Boost confidence, reduce imposter syndrome, and clarify your personal and professional goals.

Ultimately, it helps you become the go-to person in your chosen field or niche.

Building your personal brand

Richard Alvin, senior partner at the Content Crafting company,  suggests a six-step approach to cultivating and maintaining a personal brand:

Define your purpose

Start by identifying your values, goals and unique strengths. Ask: What do I care about? How do I want people to see me? What makes me special? From there, craft a clear value proposition — a sentence that sums up who you are and what you offer.

Audit your current brand

Before you build your ideal brand, you need to understand how you’re already perceived. Consider your credentials, your social capital (networks and relationships), and your cultural capital (experience and emotional intelligence). Where are the gaps?

Create your narrative

Facts are important, but stories are memorable. Develop anecdotes that illustrate your skills and character — whether that’s a bold career move, a personal challenge you overcame, or the way you led a project to success.

Communicate and embody it

Your brand isn’t just words on a CV. It’s how you show up — online, in meetings, and in casual conversations. Share your stories through LinkedIn, industry events, and personal interactions. Embody your values by consistently acting in line with your stated purpose.

Socialise your brand

Others can be powerful advocates. Surround yourself with gatekeepers, influencers, promoters, and communities who can amplify your message and open new doors.

Reevaluate and adjust

Personal branding is never finished. Seek feedback from trusted colleagues and mentors, adapt to new challenges, and continually refine the way you present yourself.

Making your mark

Personal branding isn’t about self-promotion for its own sake. It’s about clarity, consistency, and confidence — knowing what you stand for and ensuring others do too.

When done well, it helps you attract the right opportunities, connect with the right people, and make the right impact. In an increasingly competitive world, your personal brand is the story that travels ahead of you — make sure it’s the one you want told.

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Personal branding: what it is and why it matters

Tesla has almost halved the cost of leasing its electric cars in Britain, in a bid to reverse sliding sales and shore up its market share against fast-growing Chinese competitors.

British motorists can now lease a Tesla for just over half what it cost a year ago, with monthly payments on a Model 3 starting as low as £252 plus VAT. The Model Y, launched in May and retailing for about £60,000, has also been offered at under £400 per month by some leasing firms. Last summer, the same cars typically cost £600–£700 per month to lease.

Industry sources say Tesla has been forced into ad hoc discounts of up to 40% to leasing companies — both to stay competitive and because of limited UK storage capacity for unsold stock. While retail prices remain unchanged, Tesla has added zero-interest finance deals in its stores, a move analysts say will cost the company around £6,000 over three years on a £40,000 car.

“The most expensive way to find a home for these cars is by cutting the retail price. The cheapest way is to cut the monthly payments,” said Fraser Brown, managing director at consultancy MotorVise.

Tesla’s registrations in the UK fell by 60% in July year-on-year, to just 987 units, pushing its market share down to 0.7%. In contrast, China’s BYD — a relatively new arrival in the European market — claimed 2.3% of all new UK registrations, according to Society of Motor Manufacturers and Traders (SMMT) data.

Across Europe, Tesla faces similar headwinds as Chinese brands undercut on price and flood the market with aggressively priced EVs. BYD, Nio and XPeng have all stepped up their push into the continent, capitalising on consumers’ demand for cheaper electric cars as household budgets tighten.

Despite the slide, Tesla remains dominant in the used EV market, where one in four sales is still a Tesla, according to Auto Trader. Ian Plummer, Auto Trader’s commercial director, said:

“The main thing is you can access Teslas at more affordable prices and a lease is a good way to get a more affordable EV. They are still popular and generate a lot of interest on our platform — new and used — no matter what people think of Elon Musk.”

Leasing companies have become a crucial distribution channel for Tesla as private buyers remain cautious. Cash buyers accounted for just over 27% of Tesla’s new homes market activity, while leasing plans, driven by monthly affordability, are increasingly seen as the key to maintaining volume sales.

The strategy, however, highlights the fine balance Tesla must strike between sustaining demand and protecting brand value. Deep leasing discounts may boost sales volumes in the short term but risk undermining resale values and investor confidence if they become entrenched.

With interest rates stabilising and the UK government considering new incentives to support EV adoption, the next 12 months will be critical for Tesla as it seeks to prove its long-term competitiveness against a wave of Chinese imports.

Tesla declined to comment.

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Tesla slashes UK leasing costs as sales slump against Chinese rivals