When starting a business, it is good to look into who your competitors are and what industries are the most profitable. This way, you can see if it is a good industry to get into or even to partner with. Below are the top 5 most profitable industries in the UK in 2022:
1. Pension Funding – £18.42 Billion (2022 Profit)
This industry has a combination of defined benefit and defined contribution schemes. The Pension Funding business is critical in ensuring people’s financial stability. Many people believe that the state pension fund is insufficient to support them in retirement, so they have an occupational or personal pension. Over the last five years, industry revenue has increased due to merging contributions and investment returns. The gradual implementation of automatic enrolment in pension plans, which began in October 2012 and was completed in February 2018, fueled the increase in contributions pushing their profit higher.
The biggest companies in the Pension funding industry in the UK:
- Electricity suppliers
2. Banks – £13.3 Billion (2022 profit)
The main way banks get their revenue is by charging interest on loans and credit cards. The second source of income for banks comes from fees from overdrafts and back payments. Covid-19 had a significant impact on this industry, making banks change some of their interest rates to keep their customers afloat. In March 2020, the Bank of England (BoE) cut the base interest rate to a historic low of 0.1 per cent, compelling industry operators to give loans at lower rates. With this in mind, it is still the second-highest profitable industry.
Companies holding the most significant shares within the banking industry:
3. Legal – £9.32 Billion (2022 profit)
Lawyers, barristers, patent agents, notaries, and bailiffs represent private and business clients in legal matters. Like most industries within the UK, Covid-19 negatively impacted the revenue and demand for legal activities. However, particular areas of law like litigation are still thriving within the industry even through the pandemic. Since everything has opened up, the backlog of court cases will boost the legal sector back up, keeping legal activities in the top 5 most profitable industries.
The biggest companies within the legal industry:
- Allen & Overy
- Clifford Chance
- Freshfields Bruckhaus Deringe
- Slaughter and May
- DLA Piper Int
4. Accountancy Firms – £7.72 Billion (2022 profit)
Strategic and organisational planning, marketing, IT, HR consulting, and business process management are all part of the accountancy firms’ industry. This industry has grown substantially due to the increasing demand for IT services over the past year. Since Covid other industries like banking have hired accounts and process managers to help them get back on track and grow their profits.
The biggest companies within the accountancy firms industry:
- PricewaterhouseCoopers LLP
- Deloitte LLP
- KPMG LLP
5. Construction Contractors – £7.41 Billion (2022 profit)
Construction contractors work in various areas, including building construction and civil engineering. While operators are paid to complete new building and infrastructure construction contracts and meet maintenance, repair, restoration, and renovation contract requirements, the range of services provided by building contractors in this industry is extensive. . The industry did struggle due to Covid-19. However, they have started to grow again because of the backlog of construction work since everything has re-opened.
The Biggest companies within the construction industry:
- Barratt Developments plc
- Balfour Beatty Group Ltd
- Kier Construction Ltd
Listed above are the top 5 Industries within the UK that would be profitable to get into or partner with. Supermarkets also have a massive profit within the UK market, so if you have a product your business is pushing, this is also a great industry to be a part of. Other top industries within the UK in 2022 are:
- Computer Consultants – £7.18 Billion
- Security Contracts – £6.27 Billion
- Car Dealerships – £5.5 Billion
- General Insurance – £5.43 Billion
- Building Projection Development – £4.72 Billion
Top Industries with the Highest Profit Margin in 2022
It would help if you also looked into and research which industries within the UK have the highest profit margin. This will also help you decide which industries are best to partner with or even get into yourself. Below are the top 10 industries within the UK that had the highest profit margin in 2022:
- Electricity distribution – 42.5%
- Gas distribution – 42.3%
- Private equity – 34.7%
- Open-ended investment activities – 33.8%
- Search engines – 33.6%
- Commercial real estate agents – 33.4%
- Legal activities – 33.3%
- Water collection, treatment and supply – 32.1%
- Whiskey production – 31.2%
- Audiobook publishing – 31.2%
Getting Support and Advice
Hiring a concierge service like The One World will be able to give you advice on the best industry to get into. They can keep you updated on changing industry profits and support you in choosing the correct one for you to partner with or move into. Doing your research on these ever-changing margins can be very time-consuming. Giving this task to your concierge service will give you time back on running your business and concentrating on your profit.