Sector financial sustainability model, 2026-2035

1. Projected Income Composition

Stacked breakdown of Nominal Income. Assumes domestic fees track RPI (2.8%) and TNE grows at 4%. Note the shrinking proportion of Domestic Fees (Blue) post-2030.

2. Projected Cost Composition

Stacked breakdown of Nominal Costs. Staffing (Red) remains the dominant cost, compounding at ~3% annually. Estates (Orange) widens after 2028 due to Net Zero capital requirements.

3. Sector Financial Health (Central Forecast)

The delta between Total Income (Solid Line) and Total Expenditure (Dashed Line). Green zones indicate surplus; Red zones indicate deficit. The model shows a "squeeze" around 2030-2032 as the demographic cliff hits while inflation costs persist.

4. Risk Sensitivity Analysis: The "Double Squeeze"

New Scenarios

Projected Net Operating Position (Surplus/Deficit) under three conditions.
Scenario A: Costs drift 0.5% higher annually (Techflation/Finance). Scenario B (Perfect Storm): Costs higher AND Income drifts 0.5% lower annually (Soft International/TNE).