Spotlight on the UK – A guide to implementing employee benefits technology 

What does the benefits landscape look like in the UK? 

The employee benefits available in the UK are wide-ranging – out of the 80+ countries we operate in, the UK currently has the greatest number of options for employers to choose from when putting together their employee benefits package. And UK employees certainly value a high degree of choice and flexibility in benefits – 87% of UK employees say that relevant benefits improve their employee experience.  

Pension is the only compulsory benefit in the UK, but many employers choose to bolster support for their employees with a range of flexible benefits to support physical, financial, and emotional wellbeing. Some offer core company-funded benefits; others provide a range of voluntary benefits to choose from, using salary sacrifice where possible to take advantage of tax and National Insurance savings. Most employers provide a combination of these options.                         

Pension  

Employers are legally required to automatically enrol employees into a pension scheme and, depending on an employee’s contract type, the employer must also contribute to their pension fund. Employees can opt out of their pension scheme or flex their contributions. We’re seeing an increase in employers offering financial education to help their employees make informed decisions around their pension, particularly during the current cost-of-living crisis when employees may be considering reducing or even stopping their contributions to increase their take-home pay. To encourage pension contributions, employees benefit from tax and National Insurance relief via salary sacrifice.   

Government schemes 

Keen to reduce nationwide emissions, the UK Government introduced Cycle to Work and reduced the amount of tax payable for Ultra Low Emission Vehicles (ULEV) obtained via car salary sacrifice schemes. These initiatives incentivise environmentally friendly choices through significant tax and National Insurance savings.  

• Cycle to Work – Previously capped at £1000, employers can now choose their own spend limits. Employees purchase a voucher to spend on a bike and/or accessories to use for their commute to work. The cost is deducted straight from their pay over equal monthly instalments. We’re seeing increases in the spend limit, particularly as the demand for electric bikes grows meaning greater savings. An added benefit of the Cycle to Work scheme is that it encourages employees to be more active, supporting wellbeing strategies.  

• ULEV car salary sacrifice – Employees lease an ultra-low emissions vehicle and spread the cost over equal monthly instalments. The cost covers maintenance, road tax, insurance and even EV charging points. This is a very popular benefit as employees can make considerable tax and NI savings purchasing an EV this way rather than directly from a car dealer. Employees can also select a non-ultra-low emissions vehicle; however, these are not eligible for tax savings.  

• Childcare vouchers – Closed to new entrants, the scheme lets employees purchase vouchers via salary sacrifice. These are accepted by registered childcare providers nationwide and are exempt from tax and National Insurance. For parents who weren’t members of the scheme when it was closed, the UK Government offers a Tax-Free Childcare initiative that tops up qualifying parents’ contributions by 20%, subject to certain limits. 

Core benefits

To differentiate their employee benefits programme, many of our customers choose to provide a strong core offering with a level of flexibility. Typically, the employer funds a base level cover for key benefits and then employees can upgrade cover or add family.   

Private medical insurance and life assurance are two of the most common company-funded benefits. Historically we have seen other protection benefits, such as income protection, funded for senior employees but many employers are now looking to offer the same benefits across their whole workforce.  

Healthcare 

Although UK citizens receive free healthcare at the point of need through the NHS, waiting lists can be long. Private medical insurance (PMI) can be used to supplement the care employees receive through the NHS and improve access, with several providers offering a free 24-hour GP service. Where employers offer PMI, many provide it to all employees, but in some sectors it is more common to offer it to a specific group. Employees have the option to flex their cover to include their partner and children, or can chose to opt out. 

Health cash plans let members claim back the cost of everyday health expenses – such as dentistry, eyecare, osteopathy, or physiotherapy – at both private and NHS facilities. This benefit is typically employee funded, but it’s becoming more common for employers to fund a core level of cover and then offer employees the option to fund the addition of any dependants.  

We’re also starting to see employers providing life-stage health and menopause support to help employees navigate specific health challenges. For example, Syrona Health is a life-stage digital health supplier that provides both clinical and holistic support that’s typically not covered through health insurance or easily accessed through the NHS.  

Financial support and resources 

Education tools and discount schemes have proved hugely popular with our customers. Designed to help employees save on everything from everyday essentials to technology and travel, schemes include reloadable cards, exclusive discounts, and reward points. Tools such as SaveSmart are invaluable to employees who want to better understand and manage their finances. Covering topics such as budgeting, debt, saving and mortgages, employees can grow their confidence with money, at a time convenient to them. In a climate of uncertainty, financial tools are particularly popular with employees.  

Our benefit forecast… 

In the current climate in the UK, we anticipate a surge in demand for benefits that offer employees protection and security when it comes to their finances – we’re seeing more employers providing discounts and financial benefits to help employee paychecks go further. And with a nationwide drive towards more sustainable living, and many employees choosing to work for organisations that are aligned to their values, environmentally friendly benefits such as ULEV car salary sacrifice and Cycle to Work, as well as tree planting schemes, are set increase in popularity.