Even if many employees’ New Year’s resolutions are already fizzling out, a little January thought from employers about their benefits packages could have more lasting implications.
And, based on what we are observing from clients, we identify several areas we feel deserve particular consideration.
One clear trend we’ve noticed is for employees to ask questions about fluctuating returns on their pension pots resulting from recent volatility in investment markets.
So, it’s more important than ever for employers to have a strong governance process to ensure that the investment options being offered remain appropriate and that all aspects of pensions legislation are being complied with. This is something Chase de Vere can help with.
We have also observed a lot of interest from employers not currently using salary exchange for pensions in implementing the approach – which involves employees agreeing to give up a proportion of their salary in return for receiving pension contributions from their employer.
Because employees have a lower overall salary, they gain from paying less NI and Income Tax. Employers can also save on NI contributions, and this can further benefit employees because part of this saving is often used to enhance employee pension contributions or other benefits.
In some cases, such savings are proving particularly valuable in enabling employers who hadn’t previously offered a death-in-service scheme to start providing one. As this is one of the more affordable employee benefits, salary exchange savings from pensions are often more than enough to cover the entire costs.
Salary exchange can also be used effectively in conjunction with up to £500 of pensions guidance or advice, and for Cycle To Work schemes and Ultra Low Emission Vehicles — and we have been receiving an increasing number of questions about electric cars from environmentally conscious employers.
Employee wellness is another area worthy of a little New Year’s attention, because even if employers feel they are well catered for in this regard, their arrangements may need tweaking.
The health and wellbeing marketplace is constantly changing, and the benefits and added-value features being offered may no longer be the most competitive or appropriate.
With a staggering 7.2 million people currently waiting in the NHS queue, any employer that doesn’t have a private medical insurance (PMI) scheme should seriously consider whether they can afford one.
The outlay can often be justified purely on grounds of the reduction in absenteeism and presenteeism costs that result from being able to access immediate private treatment at a time that fits in with employees’ workloads.
And those employers that already offer PMI need to reappraise whether they currently have the right benefit and excess levels. Added-value features like virtual GP services and online mental health support also need regularly evaluating.
Companies that feel they can’t stretch to PMI could still consider the merits of health cash plans, which don’t cover the costs of expensive operations but can help towards a whole range of minor medical expenses – including routine optical and dental check-ups and treatments, specialist consultations and alternative therapies like osteopathy and chiropractic.
Additionally, the ability of both PMI and cash plans to automatically include employee assistance programmes (EAPs) should not be underestimated, particularly in view of increased take-up rates. According to the Employee Assistance Professionals Association (EAPA), average usage reached 12% in 2022 compared to 11.4% in 2021.
By offering confidential 24/7 stress counselling and a raft of other benefits, such as help with legal problems and financial difficulties, EAPs can also help slash absenteeism and presenteeism costs.
Their focus on financial wellbeing is proving especially important during the current
cost-of-living crisis. A YuLife report published this January shows that 64% of working adults are more worried about their financial wellness today than a year ago.
Some employers are going a stage further and actually providing stand-alone financial education services. Chase de Vere is well placed to help here, offering a range of financial education courses, including a new cost-of-living module.
If you would like to find out more about how Chase de Vere can help you in any of the areas we have highlighted then please don’t hesitate to contact your consultant.
Content is correct at the time of writing and is intended for general information only and should not be construed as advice.