Employee benefits in the United Kingdom

Benefits

1. Healthcare / Private Medical Insurance

The NHS is the second largest single-payer healthcare system in the world. It’s funded by the government through general taxes and in part through National Insurance. All legal UK residents have access to healthcare, with most services being “free at the point of use.” This typically means no charge for both critical and non-critical medical care, except for some specific NHS services such as eye tests, dental care, prescriptions and some elements of longterm care.

Aside from the NHS, there is a statutory requirement for employers to protect workers from the health risks of working with display screen equipment (DSE). For qualifying employees, employers must offer eye testing, and Ben partners with a few providers of DSE vouchers here.

As high pressures on the NHS have sent wait times skyrocketing in recent years, Private Medical Insurance (PMI) has become an expected employee benefit. Private healthcare treatment usually allows individuals to skip the long NHS queues for non-critical care and provides access to private hospitals. It also typically covers many procedures not covered by the NHS. Market standard PMI does not necessarily cover spouse, dependents, or pre-existing conditions, but some employers do choose to offer these or provide via a flexible scheme. 

It’s also common for employers to offer an Employee Assistance Program (EAP) and a Health Cash Plan. EAPs are a benefit which typically offer free and confidential assessments and short-term counseling. Here are some of Ben’s partner EAPs. Health Cash Plans help employees manage increasing health costs by providing cashback on things like dental and optical expenses. A basic level can be as little as £5 per employee per month, and Medicash is a popular provider of this benefit.

Popular PMI providers in the UK include:

• Bupa
• Aviva
• Vitality
• Healix
• AXA Health
• Freedom Health

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Click here to view our catalogue on private medical insurance providers in the UK

2. Retirement

In the UK, your retirement fund is called your pension. It’s a way of saving for retirement that’s arranged by your employer. Workplace pensions can also be called ‘occupational’, ‘works’, ‘company’ or ‘work-based’ pensions.

How do they work? Each month, a percentage of your paycheck goes into your pension pot, and your employer also makes a contribution. The statutory (mandatory) contribution is 5% from the employee (with the option to upgrade) and 3% from the employer. We see many of our more competitive clients contributing 5% - 7% or offering matching schemes up to 7% - 10%.

Employers must also comply with strict pension auto-enrolment legislation.

Some of the most popular Pension providers in the UK include:

• Nest
• People’s Pension
• Aviva
• Aegon
• Scottish Widows
• Royal London
• Smart Pension

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Click here to view our catalogue on pension providers in the UK

3. Life Insurance, Income Protection (Disability) & Critical Illness

UK employees pay into the National Insurance Scheme (NIS) in order to to qualify for state pension and state benefits. This includes sick pay, maternity/paternity allotments, as well as when individuals are unemployed, ill or on bereavement leave. Statutory benefits are quite low and it’s market standard for many companies to provide additional life insurance and income protection coverage.

Life insurance is the most common risk benefit and pays out a tax-free cash lump sum to beneficiaries in case of death. Usually covers a multiple of an employee’s income, generally between 2 and 4 times (although up to 15 times earnings is typically possible particularly through a flexible benefits scheme).

Income protection is the second most common risk benefit and covers

Critical Illness is less common, but many employers

Most group risk products are a tax-free benefit, making them very cost efficient if paid via an employee benefits program.

Leading providers include:

• Canada Life
• Aviva
• Legal & General
• Unum
• Zurich
• MetLife

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Click here to view our catalogue of insurance products in the UK

4. Other tax-advantaged benefits

Salary sacrifice is a government-backed scheme designed to help employers and their workers save on tax. An employee agrees, with their employer, to give up part of their salary in exchange for non-cash benefits. This means that the employee's gross salary is reduced by the amount they sacrifice. The result is lower National Insurance contributions (NICs) for both the employee and employer.

Examples of salary sacrifice schemes include:

• Cycle to Work
• Techscheme
• Charitable Giving
• Electric Car Leasing
• Workplace Nursery

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Click here to view our catalogue of salary sacrifice schemes in the UK

5. Other Common Benefits

• Employee Discounts
• Subsidised gym membership and access to mental health apps
• Mental health and well-being support
• Mental Health Leave
• Season ticket loans
• Personal Development Leave & Learning and Development budget
• Sabbaticals
• Volunteering days

Policies

1. Maternity & Paternity

Statutory Maternity Pay (SMP) is paid for up to 39 weeks.

Pay is 90% of your average weekly earnings (before tax) for the first 6 weeks, and £172.48 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks.

The leave allotment is 52 weeks in total, and this is the same for adoption leave. You don’t need to take the full 52 weeks, but you must take 2 weeks’ leave after your baby is born (or 4 weeks if you work in a factory).

Paternity leave is either 1 or 2 weeks (by choice), and must be taken in one go. It cannot start before the birth, and must be taken within 56 days of the birth. The statutory rate of Paternity Pay is £172.48 weekly, or 90% of your average weekly earnings (whichever is lower).