Industries with the Biggest Increase in Profit Margin in the UK in 2025

1. Pension Funding in the UK

Percentage Point Increase for 2025: 116.9pp

Pension funds are undergoing a period of change. The past few years marked a shift from defined benefit (DB) to defined contribution (DC) schemes dominating the industry. Following the onset of the COVID-19 pandemic, equity markets were destabilised, causing asset values to decline in 2020. However, the steady recovery of economic conditions as the pandemic wound down was mirrored in equity values, supporting pension fund assets.

Pension funds were rocked in late 2022, when a fire sale of gilts meant that funds were forced to sell assets to meet margin calls. The hit taken to pension assets means that revenue is... Learn More

2. Pipeline Transport in the UK

Percentage Point Increase for 2025: 15.6pp

Natural gas reserves in the UK, domestic electricity production and the world prices of natural gas and crude oil significantly influence the performance of pipeline operators. The complex infrastructure of long-distance pipeline transport lends itself to a limited number of operators rather than a host of companies in charge of various sections across different regions. As a result, most companies in the industry operate as monopolies, although bodies like Ofgem and NIAUR tightly regulate them. The National Grid dominates and accounts for the bulk of activity as it owns the gas transmission system in Great Britain. Revenue dove sharply in... Learn More

3. Electricity Transmission in the UK

Percentage Point Increase for 2025: 13.1pp

The UK's electricity transmission network is made up of four high-voltage onshore transmission networks owned by the National Grid Electricity Transmission plc, SP Transmission plc, Scottish Hydro Electric Transmission plc and Northern Ireland Electricity Networks Ltd. Each company operates a regional monopoly on different transmission networks and is heavily regulated through price controls. Efforts by the government to decarbonise the electricity supply chain have necessitated substantial investment in transmission networks in recent years.

Revenue is forecast to increase at a compound annual rate of 11.3% to reach £8.6 billion over the five years through 2023-24. Network expansion has supported transmission revenue... Learn More

4. Book Retailers in the UK

Percentage Point Increase for 2025: 7.3pp

Book retailer revenue is set to drop by 4.2% over the five years through 2023-24, and growing 0.2% in 2023-24 to reach £963.8 million. COVID-19 lockdowns led to a resurgence in reading; according to Nielsen Books's article in May 2020, 41% of people read more books during the initial national lockdown. Social media platforms like TikTok have also boosted reading among younger folks, helping specific book genres grow. The physical closure of bookshops during lockdown periods restricted the ability of retailers to benefit from the growing demand for books. Since restrictions eased, independent bookshops have increased, by the end of... Learn More

5. Sea & Coastal Passenger Water Transport in the UK

Percentage Point Increase for 2025: 6.7pp

Over the five years through 2023-24, sea and coastal passenger water transport revenue is anticipated to drop at a compound annual rate of 6.6% to £2.3 billion. The industry is heavily reliant on domestic and international tourism. Cruise ships have performed robustly over most of the period and have expanded by marketing value, including all-inclusive holidays. However, demand for international ferry services has wavered as a result of intense competition from air and rail transport. Travel restrictions in response to the COVID-19 outbreak caused passenger numbers to plummet during 2020-21.

Changing tourist trends and technological developments have maintained a strong demand... Learn More

6. Game & Toy Manufacturing in the UK

Percentage Point Increase for 2025: 6.0pp

Game and toy manufacturers have performed resiliently in recent years in the face of rising import penetration and changing consumer tastes. Successful product developments to maintain interest from children and their parents have supported sales. Nevertheless, intense competition from imports has mitigated the effect of growing domestic demand. Revenue is expected to increase at a compound annual rate of 1% over the five years through 2023-24 to reach £796.9 million.

The collapse of major toy retailer Toys “R” Us in 2018 highlights some of the issues toy manufacturers face; competition from imports and video games has limited opportunities. Professional games have... Learn More

7. Confectionery Wholesaling in the UK

Percentage Point Increase for 2025: 5.7pp

The Confectionery Wholesaling industry has endured a challenging operating environment. Concerns over the health problems attributed to the consumption of confectionery, like obesity, have deterred demand for several products high in sugar and fat. Many small wholesalers are operating in the industry alongside major confectionery producers' wholesale and distribution divisions, including Mondelez, Mars Wrigley Confectionery and Nestle. Revenue is expected to contract at a compound annual rate of 3.4% to £8.6 billion over the five years through 2023-24, including an anticipated 2.4% drop in 2023-24.

Wholesalers have invested in developing their product mixes to reduce sugar content, spurred by shifting consumer... Learn More

8. Communication Equipment Manufacturing in the UK

Percentage Point Increase for 2025: 5.4pp

The world is increasingly connected. People communicate through a host of devices and services such as smartphones and computers. Connections are made via radio, TV, infrastructure and smart devices such as alarm systems, which are now often connected directly to the authorities. Communications equipment is used to establish these connections and manufacturing such equipment is a vital component of the global manufacturing sector. UK firms specialise in producing high-value products, competing on quality rather than price. Despite high global demand, the industry is in long-term decline, as cost pressures have forced manufacturers to relocate offshore.

Over the five years through... Learn More

9. Reinsurance in the UK

Percentage Point Increase for 2025: 5.3pp

Reinsurers' revenue is expected to have crept upwards at a compound annual rate of 2.4% to £20.2 billion over the past five years; this includes a forecast rise of 3.8% in 2022-23 when the average profit margin will likely reach 3.9%. Following two years of COVID-19-related payouts, life and health claims are normalising.

For the fifth time since 2017, natural catastrophe losses exceeded $100 billion (£81 billion) in 2022, according to Reinsurance broker Gallagher Re. The frequency and severity of natural catastrophes intensify with climate change, and spiralling inflation only adds to the cost of payouts, depleting reserves and pushing up... Learn More

10. Conference Centres Letting & Operating in the UK

Percentage Point Increase for 2025: 5.1pp

Over the five years through 2023-24, revenue is projected to contract at a compound annual rate of 2.8% to £778.5 million. This contraction was mostly driven by COVID-19 disruptions causing revenue to plummet, which conference centres are yet to fully bounce back from. The EU referendum drove volatility in business markets, with many companies holding off on spending while market conditions were uncertain. However, conference centres continued to attract bookings; they drew in demand by investing in improving venues (renovating spaces, introducing new technologies, etc.). At the same time, the government was promoting the UK's reputation for hosting quality events... Learn More