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The most common employee benefits in the UK

When you consider the term ‘employee benefits’, it’s natural to think that the employee gets all the benefits. However, if you think about the number of employees that would be more likely to stay at a job that offers good benefits, then it becomes evident that employers also have something to gain. In this Pacific Prime UK article, we’ll take a look at the most common employee benefits in the UK.

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Health insurance

According to a survey conducted by the employee services company Personal Group, 40% of 1,007 UK employees want health insurance included in their benefits package. It comes as no surprise that staff consider health insurance to be one of the key factors in a company benefits package, and that most employers provide it as a result.

Health insurance is an insurance policy that will cover certain amounts of money for medical costs or treatments. Health insurance policies that are provided by employers, which are also known as group health insurance policies, provide employees with various options for insurance coverage. Group health insurance plans typically cover the cost of medical checkups, hospitalisation, operations, ambulance transportation, and emergency room services.

Life insurance

With 90% of organisations offering life insurance, this type of insurance is easily one of the most common and sought after. Life insurance, or Death in Service, pays a lump sum in the event of an employee’s death to offer support to family or loved ones who are financially dependent on them. Typically linked to a pension plan, the tax-free amount is usually multiples of three to four times the employee’s base salary.

Pension

Another common employee benefit in the UK is a pension, which aims to fund an employee’s retirement.

Defined contribution

These days, most pensions are “defined contribution” pensions. This type of pension requires both the employer and employee to put a certain amount of money into a pension account on a regular basis. Therefore, the worth of the pension varies from employee to employee, depending on what they have put in.

Upon retirement, the employee has a certain amount of cash that they can use towards their retirement in different ways – like an annuity, for example. The primary reason that employees want a pension through work is that their employer will typically also contribute.

Defined benefit

“Defined benefit” pension is another type of pension that is becoming less popular in private sector companies. In defined benefit pensions, the amount the employee receives upon retirement is calculated by using a formula, which may include their average salary over time, final salary, or how long they worked at the company.

Pension auto-enrolment

Pension auto-enrolment is a government initiative that requires employers without a pension scheme to offer one to their employees.

Paid sick leave and holiday

Most employees are entitled to GBP £94.25 (for 2019/2020) after their fourth day of sickness. Known as Statutory Sick Pay, this benefit covers employees up to 28 weeks and is paid by the employer. In some cases, employers offer more sick pay, which is usually called Occupational Sick Pay, or provide cover for an extended period. By finding out the amount they’d be paid, and for how long, employees can decide if they need other types of cover.

Dental and optical insurance

Corporate dental insurance typically reimburses the cost of routine NHS dental treatments, such as examinations, fillings, hygienists, and crowns, as well as accidents and injuries. Additionally, it can contribute towards the cost of more costly treatments like implants or private treatment up to a set limit.

Optical insurance helps cover the cost of eye tests, glasses, and contact lenses. Typically, it pays out a lump sum if an accident or permanent sight loss occurs. In both instances, cover can often extend to family members as well.

Gym membership

Some employers will provide employees with a free or discounted gym membership, which makes sense since that’s what 34% of the Personal Group respondents are after. Similarly, 55% of respondents aged 18 to 24 said discounted gym membership is the benefit they want to see added the most.

Other common employee benefits in the UK

This list of employee benefits in the UK includes some of the most common, though there are several others that are still quite popular, such as short and long term disability and critical illness. To top it off, employees nowadays are looking for a mixture of traditional and modern benefits, with the latter including corporate wellness programs and pet insurance.

Creating an employee benefits plan

An ideal employee benefits plan appeals to candidates and helps to retain current employees. Designing a competitive employee benefits plan and keeping costs affordable can be a tricky balance, but it is certainly doable.

If you need help with your employee benefits plan, you can reach out to an employee benefits broker like Pacific Prime UK. Our team of expert advisors has years of experience in providing employee benefits advice and company insurance solutions to companies of all sizes. Ready to find out how Pacific Prime UK can help your business? Contact us today.

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Content Creator at Pacific Prime UK
​​Jantra Jacobs is a content writer at Pacific Prime. On a typical workday, she writes and edits articles, guides, and anything else word-related. She loves creating content that is both easy to understand and enjoyable to read.

In her free time, she’s likely to be writing poetry and prose, geeking out on her latest interests, reading, or practicing yoga.
Jantra