The Most Common Employee Benefits in the UK
In the UK, companies are no strangers to the concept of employee benefits, as some core benefits are made mandatory by the government. However, many companies go above and beyond statutory requirements.
To help you stay one step ahead of the curve and offer a competitive benefits package for employees, this Pacific Prime UK article takes a closer look at the most common employee benefits in the UK.
Types of Employee Benefits in the UK
Supplementary benefits that many companies offer include the likes of private medical insurance, dental and optical insurance, life insurance, employee wellness programs, and other perks and incentives (you can get as creative as you like here!).
A pension scheme aims to fund an employee’s retirement. The amount the employee and the employer pays towards the pension pot depends on the type of workplace pension scheme and whether the employee has been automatically enrolled in a workplace pension or has joined one voluntarily.
These days, most pensions are “defined contribution” pensions. This type of pension requires both the employer and employee to regularly put a certain amount of money into a pension account. Therefore, the value of the pension varies from employee to employee, depending on what they have put in.
A “defined benefit” pension is a pension type that is becoming less popular in the private sector. Here, the amount the employee receives upon retirement is calculated using a formula, which may include their average salary over time, final salary, or how long they have worked at the company.
Most employees who work a 5-day week must be given at least 28 days of paid annual leave a year by their employer. This is equivalent to 5.6 weeks of holiday. Part-time employees and employees who work irregular hours are also entitled to the aforementioned holiday entitlement on a prorated basis.
Employers can choose to offer more leave than the legal minimum and can apply their own rules to these extra leave.
Paid Sick Leave
Most employees are entitled to GBP £109.40 per week if they’re too ill to work. Known as Statutory Sick Pay, this benefit covers employees for 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.
Paid Maternity and Paternity Leave
Pregnant employees in the UK can also get up to 52 weeks of statutory maternity leave – the first 26 weeks is ordinary maternity leave and the last 26 weeks is additional maternity leave.
Statutory maternity pay is paid for up to 39 weeks, and employees get 90% of their average weekly earnings for the first 6 weeks and GBP £172.48 or 90% of their average weekly earnings (whichever is lower) for the next 33 weeks. Paid paternity leave is usually 1 or 2 weeks.
Note: Pregnant employees and their partners may also be able to get shared parental leave and statutory shared parental pay.
As the UK has a comprehensive public healthcare system – the National Health Service (NHS), private health insurance isn’t a mandatory benefit for employees. However, it’s becoming increasingly popular due to the long wait times associated with the NHS.
Employer-sponsored health insurance is also known as group health insurance policies and provides employees with various options for insurance coverage. They typically cover the cost of medical checkups, hospitalisation, operations, ambulance transportation, and emergency room services.
Note: Some employers also extend health insurance coverage to employees’ dependents.
Dental and Optical Insurance
Dental and optical insurance are optional extras that can be provided as part of an employee’s insurance benefits. Dental insurance typically reimburses the cost of routine NHS dental treatments. It can also contribute towards costlier treatments like implants or private treatment up to a set limit.
Similarly, 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.
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.
Employee Wellness Programs
Given the mind-body connection, as well as increasing awareness of the role of employee health on their happiness and productivity, employers in the UK are also increasingly offering employee wellness programs.
These are extremely varied and include things like employee assistance programs (EAPs), free or discounted gym membership, healthy eating programs, mindfulness sessions, and more.
Other Common Employee Benefits in the UK
This list of benefit schemes for employees 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 a four-day work week, remote or hybrid working program, unlimited days off, pet insurance, and more.
Contact Pacific Prime UK for Help Creating an Employee Benefits Plan!
For help with your employee benefits (EB) program, reach out to Pacific Prime UK! Our team of expert advisors has 20+ years of experience in providing EB advice and company insurance solutions to organisations of all sizes and industries using a tailored, technology-driven approach.
In fact, we can even offer flexible (flex) benefits. Unlike traditional employee benefits, flex benefits allow employers to offer a variety of benefit options for employees to create a customised benefits plan.
Ready to find out how Pacific Prime UK can help your business? Contact us today.