BRITS have been scrambling for tea bags after strikes at Tetley’s factory sparked fears of a shortage. 

After last week’s news of a potential tea drought, thousands rushed to supermarkets to secure their beloved cuppa. 

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The alarm was triggered when almost 150 GMB members working at Tata Consumer Products, which makes Tetley Tea in Teesside, announced they would lay down tools in anger at “poverty pay” on Friday and Monday. 

The factory is Tetley’s biggest in the world, and it supplies 30 percent of the UK’s tea.

As panic-buying kicked in, Iceland Foods and The Food Warehouse supermarkets reported a dramatic surge in sales.

On Thursday alone, Tetley’s original bag sales shot up by 100 per cent compared to the previous day.

And over the following four days, sales of Tetley’s tea, decaf, peppermint, and green tea bags spiked by 250 per cent compared to the previous week.

More than a million tea bags were sold, driven by offers on peppermint and green tea, according to the supermarket chain. 

An Iceland spokesperson said: “Britain loves a brew and the threat of a tea shortage sparked some small panic amongst shoppers over the past four days.

“As soon as the news broke that there could be a tea shortage, our customers immediately made sure they were fully stocked, just in case stock levels drop.”

They also reassured shoppers they have enough stock for Britain’s brews, adding: “Fear not tea drinkers, despite the rush, we still have enough tea bags in stock to keep Britain’s thirst quenched. Whether it’s Tetley’s, Yorkshire Tea, PG Tips or Typhoo, we have a proper brew waiting for you!”

Members of the GMB union at the Eaglescliffe factory, near Stockton, voted to take industrial action after being offered a 4.4 percent pay rise, compared to the 7 per cent they received last year.

Tata Consumer Products said: “We are disappointed with the decision to strike particularly when we have two offers on the table.

“We are not immune to the difficult economic circumstances facing families and businesses, but we do believe the pay award offers made by us to be fair.”

It is not the first time fears of a tea shortage hits Britain.

Earlier this year, Sainsbury’s cautioned shoppers in some stores that there are “nationwide” problems which could impact the availability of black tea.

But retail bosses have said the problems are “temporary” and stressed that the impact on consumers is expected to be “minimal”.

A sign in one Sainsbury’s store read: “We are experiencing supply issues affecting the nationwide supply of black tea. 

“We apologise for any inconvenience and hope to be back in full supply soon.”

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New analysis published today by consultants Lane Clark and Peacock argued that the Chancellor is likely to be taking a keen interest in pension tax relief – with a net annual cost estimated by the Treasury at around £48 billion.

The analysis examines the potential for changes to pension tax relief as part of the October 30th Budget.

The authors argued that some changes, such as introducing ‘flat rate’ tax relief – though potentially lucrative – are highly unlikely politically.

This is especially true because a significant group of beneficiaries of higher rate relief are mid-ranking and senior public sector workers, a group which the government is unlikely to want to alienate.

However, there are other aspects of the system where the Chancellor may judge that there is the potential to raise significant additional revenue.

The three areas considered in the paper are employer NI to be levied on employer pension contributions, a cap on tax-free lump sums and reducing the tax privileges of pensions on death.

On employer NI to be levied on employer pension contributions, the authors maintained that levying full NI on employer contribution in one go would be a huge increase to the costs of businesses.

They said this could damage the government’s growth objective and would also be likely to reduce the amount of money firms were willing to spend on their workers’ pensions – and therefore reduce retirement incomes.

At present, where a worker is paid a wage, that wage is subject to both employee NI contributions (now at 8%) and employer contributions (at 13.8%).

But if that same remuneration is paid into a pension, no NI is levied on either the worker or the firm.  Because of this difference, in many workplaces an HMRC approved system of ‘salary sacrifice’ is in place where workers agree to a pay cut in return for a deal whereby their individual pension contributions are also made by their employer to reduce the overall NI bill.

The Government estimates that the cost of not charging NI on the pension contributions made by employers is around £23.8 billion.

Steve Webb, partner at LCP said: “The Chancellor will be looking for relatively simple changes which can be introduced quickly and will raise large sums with least voter anger.  Changes to taxes on business may fall within that category, and the large cost of exempting employer pension contributions from National Insurance Contributions will not have escaped the Chancellor’s attention”.

On the issue of capping tax-free lump sums, LCP modelling suggests that many public sector workers with long service in their public sector pension scheme may well be caught by a cap at this level.

The authors said whenever pension tax relief limits have been cut in this way in recent years, a system of ‘transitional protection’ has been introduced for those already over the limit or set to be so.  It is likely that a cut in the cap on lump sums would also have to be accompanied by a complex system of protections.

But this would dramatically reduce the short-term revenue that would be raised from such a measure.

Alasdair Mayes, partner at LCP said: “Capping tax-free lump sums sounds simple in theory but would be complex in practice.  Complex transitional rules would need to be designed for those who would otherwise be unfairly affected by the change, and this could mean it would take months or years to implement.  This would also reduce the revenue-raising potential of the measure and may mean the Chancellor decides it is not worth the political pain”.

The paper also touched on reducing the tax privileges of pensions on death. The authors said an anomaly which the Chancellor might look at is the rules which allow people to inherit a pension pot free of income tax where the person who died was under the age of 75.

This distinction based on the age at death could be removed but is expected to raise relatively little revenue.

Tim Camfield, senior consultant at LCP said: “Pension pots currently offer significant tax benefits upon death, generally being shielded from Inheritance Tax. While it can be argued that reform could encourage the use of pensions for income to the saver and their spouse rather than inheritance, any changes must be weighed carefully to avoid unintended consequences such as penalising unmarried partners.”

AN ICONIC fashion and homeware chain is making a triumphant return to the high street with the opening of its first new store next month.

Cath Kidston, which closed all its high street locations in June 2023, will unveil a brand new store on 18 October, The Sun can reveal.

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Renowned for its charming floral designs and quirky vintage-style homeware, Cath Kidston has been a beloved fixture on the British high street since 1993.

However, the retailer entered administration in April 2020 and was subsequently rescued by Next through a pre-pack administration deal last year.

Next acquired the Cath Kidston brand name, domain names, and intellectual property for £8.5 million last year.

But, the agreement did not include any of the brand’s physical shops.

As a result, Cath Kidston’s four remaining standalone stores closed their doors for the final time in June 2023.

Since then, shoppers have only been able to purchase Cath Kidston products exclusively through Next, both online and in-store.

This will change on Friday, 18 October, when the chain’s first new store since its sale to Next will open.

The new shop, which is now being teased in a video on Cath Kidston’s Instagram page, will be located at Westfield White City, London.

Cath Kidston posted on Instagram and said: “Why yes. Yes, you guessed right.

“We do indeed we have a new home opening soon. Can anyone tell where in London we’ll be opening our doors?”

Next refused to comment when The Sun asked if it has plans for more store openings in the future.

RETAIL WOES

Cath Kidston initially collapsed into administration back in April 2023.

The retailer immediately closed 60 UK stores, leaving 908 staff members redundant.

The brand was bought by Next in March 2023.

In the interim, the retailer’s four remaining stores and e-commerce website continued to operate as usual.

However, the chain’s website was taken down in early June, and customers visiting it were automatically redirected to Next.co.uk.

Cath Kidston’s stores in Ashford, York, Cheshire Oaks and Picadilly then closed for the final time on June 25, 2023.

Shoppers were lucky enough to bag items up to 70% during a major clearance sale ahead of these closures.

Next has been known to save failing companies from administration.

In November 2022, it bought furniture store Made.com, which sold its intellectual property, brand and website to the retailer.

Next started selling Gap clothing online in late 2021 too, after it took over the running of the high street brand.

Earlier in 2023, it took a stake in baby and maternity clothing retailer JoJo Maman Bebe.

Cath Kidston isn’t the only bust chain to be reopening high street store.

Fashion chain M&Co returned to the high street in April after previously collapsing into administration and closing all stores.

The chain opened its first new store on May 3 in Newton Mearns, Scotland.

MORE STORE OPENINGS

Several major retailers are defying the trend of store closures by actively opening new shops.

German discounter Aldi has announced it will open 35 new UK stores this year. The openings form part of Aldi‘s long-term target of operating 1,500 stores in the UK.

Asda has been opening hundreds of convenience stores as it looks to rival major players Tesco and Sainsbury’s.

Purepay Retail Limited , the parent company of Bonmarché, Edinburgh Woollen Mill (EWM) and Peacocks, Purepay Retail Limited, has said it wants to open 100 new high street stores over the next 18 months.

Home Bargains has said it wants to “eventually have between 800 and 1,000 retail outlets open”.

Primark is also opening new branches and investing and renovating more than a dozen of its existing shops.

Screwfix is set to open 40 new stores nationwide as its owner, Kingfisher, seeks to expand the DIY brand’s national presence.

Tesco has revealed plans to open 70 more stores across the UK over the next year as part of major expansion plans.

WHSmith has turned its focus to the travel side of its business, with plans to open new sites in airports, railway stations and hospitals.

Good morning and welcome to your Morning Briefing for Friday 27 September 2024. To get this in your inbox every morning click here.

Chancellor ‘likely to set sight on’ £48bn pension tax relief in Budget

New analysis published today by consultants Lane Clark and Peacock argued that the Chancellor is likely to be taking a keen interest in pension tax relief – with a net annual cost estimated by the Treasury at around £48 billion.

The analysis examines the potential for changes to pension tax relief as part of the October 30th Budget.

The authors argued that some changes, such as introducing ‘flat rate’ tax relief – though potentially lucrative – are highly unlikely politically.

How ‘anti-tax’ advice is failing clients – and society

Many talk about tax as something scary and complex that only professional advisers can navigate, which can disempower clients and potentially make them overly reliant on their advisers, writes Olivia Bowen, partner client advice, at Castlefield

Most firms in this sector talk about tax as something to be avoided, even if it means tangling up clients’ affairs in complicated trusts or other arrangements.

There’s a tendency for advisers to assume clients always want to maximise tax savings, regardless of the resulting complexity. But not all clients want this.

Consumer protection drives biggest rise in regulatory pressure

The greatest increase in regulatory pressure stems from requirements to comply with and embed consumer protection regulations, KPMG has revealed.

It was revealed in KPMG UK’s latest Regulatory Barometer, a biannual measure of the regulatory pressure faced by financial services firms in the UK and EU.

The regulatory impact score in this area has risen from 6.8 to 7.4 (out of 10) since March 2024.

Quote Of The Day

Hundreds of thousands of people take their pensions each year with no advice, and much more needs to be done to help them make well-informed decisions.

– Steve Webb, former pension minister and consultant at LCP, comments on the FCA’s latest Retirement Income Market Data figures.

In Other News

7IM has appointed Asim Qadri and Brian Leitao as investment managers. The duo will report into Uwe Ketelsen, head of portfolio management. In their new roles, they will focus on enhancing and deepening 7IM’s fund selection and portfolio management capabilities.

Qadri joins from Abrdn where he was part of the multi-asset team responsible for investment manager research and portfolio construction across various asset classes. Before then, he worked in similar roles at Architas, Mercer, and Société Générale.

Leitao has eight years of investment experience gathered at Fundhouse, EQ Investors, Morningstar and most recently Mercer. Throughout his career, he has conducted fund research across a broad range of sectors and geographies, both actively and passively managed. He also performed asset class research more broadly across wealth and institutional teams.

Their appointments follow a series of hires across the business by 7IM this year, with further recruitment underway. This positions 7IM for growth as it seeks to cement itself as one of the leading vertically integrated players in the wealth management industry.

Reeves mulls tweaks to UK’s tax plans for ‘non-dom’ foreigners (Bloomberg)

Many Wall Street executives are worried about Trump but wary of Harris (Reuters)

China’s bumper stimulus leaves consumers wanting more (Financial Times)

Did You See?

How tech can transform the industry’s pain point

Technology has done wonders for advice over the past decade, helping millions of people over the years, but it is nowhere near where it needs to be for the industry to achieve its fullest potential, writes Russell Lancaster, 7IM’s managing director, platform and intermediary partnerships.

According to a recent report from The Lang Cat, if the advice industry were to reduce technological inefficiencies and processes, client volumes per firm could increase by 40-50%, which equates to an uptick of two million customers.

Some of the causes of these inefficiencies lie in poor technological infrastructures, coupled with incompatibilities between platforms and providers.

One area where much progress needs to be made is the transfers process.

Transfers can only work as fast as the slowest player involved, and a provider servicing an outgoing customer might not be highly motivated to see its money moving off its books.

Read the full article here.

MILLIONS of households are no longer eligible for this year’s winter fuel payments.

However, hundreds of thousands of households could secure the cash if they launch a claim for pension credit before the December deadline.

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In the past, winter fuel payments worth up to £300 were available to everyone aged 66 and above.

However, after Labour’s election victory, Chancellor Rachel Reeves introduced cuts limiting winter fuel payment eligibility to those on pension credit or other means-tested benefits.

To be eligible for this year’s payment, you must have an active claim for the benefits mentioned above during the “qualifying week,” which runs from 16 to 22 September (this week).

Most households automatically receive the winter fuel payment, including those on pension credit.

However, 800,000 households are thought to be missing out on pension credit, which unlocks their eligibility for this year’s winter fuel payment.

As new claims for pension credit can be backdated by up to three months, you can still apply now and qualify for this year’s winter fuel payment.

The absolute deadline to claim the benefit and qualify is December 21.

Pension credit tops up your weekly income to £218.15 if you are single or to £332.95 if you have a partner.

This is known as “guarantee credit”.

If your income is lower than this, you’re very likely to be eligible for the benefit.

What if my income is higher?

If your income is slightly higher than the following rates, you might still be eligible for pension credit:

• Single: £218 a week
• Couple: £333 a week

For example, single applicants might still be eligible if their weekly income is under £235.

And those in couples may still get it if they earn under £350 a week.

Those with disabilities, who care for someone, or who get help with their housing costs could still qualify.

For example, if you claim attendance allowance, the threshold at which you can qualify for pension credit rises by £82 a week.

The benefit is open to people over state pension age who need help with personal care due to a physical or mental disability.

The income you receive through attendance allowance is not counted towards your eligibility for pension credit.

If you claim carer’s allowance, the threshold at which you can qualify for pension credit also rises by £46 a week.

Those who receive help with their housing costs could also still be eligible for pension credit even if they breach the earnings thresholds.

For example, you could get an extra amount to cover your housing costs, such as:

• Ground rent if your property is a leasehold
• Some service charges
• Charges for tents and site rents

The exact amount you could get depends on your housing costs.

However, if you’re found to be eligible for pension credit, it could unlock your ability to qualify for the following extra support:

• Council tax reduction
• Housing benefit if you rent the property you live in
• Support for mortgage interest if you own the property you live in

What about savings?

If you have £10,000 or less in savings and investments, this will not affect your eligibility for pension credit.

If you have more than £10,000, every £500 over £10,000 counts as £1 income a week.

For example, if you have £11,000 in savings, this counts as £2 income a week.