Employers have an opportunity to improve retirement outcomes as well as financial wellbeing and staff retention by addressing gaps in adequacy, equity and flexibility in their benefits, according to Hymans Robertson.
According to a report from Hymans, titled “Employee benefits 2026: trends and employer priorities”, adequacy, equity and flexibility across pensions, health and protection and financial wellbeing will be the themes that matter most in 2026.
The research highlights that pension adequacy remains the biggest challenge. Master Trusts are now the dominant option, used by over half of employers, but, accoding to Hymans, “contribution design is the key differentiator”. Around 84 per cent of employers set employee defaults at 3-5 per cent and two-thirds default total savings at 10 per cent or less, giving the average earner less than a 31 per cent chance of achieving a moderate retirement income.
Hymans says employers can improve outcomes by raising defaults or introducing auto-escalation, which could increase the likelihood of a moderate retirement income from less than one in three to more than one in two at little extra cost.
Meanwhile, salary sacrifice is now almost universal and delivers clear savings for both employers and employees. However, only 27 per cent of employers share some or all of their National Insurance savings with employees, while full sharing is rare at 7 per cent. Hymans says this represents a missed opportunity to boost perceived value. It says that since National Insurance relief on employee contributions will be capped at £2,000 from April 2029, employers will need to adapt their reward strategies quickly.
In health and protection, PMI remains a standout benefit, offered by 91 per cent of employers but access is uneven with around 34 per cent restricting eligibility by grade, which can create potential equity risks.
Elsewhere, group income protection is also widely used, but again, its design often limits effectiveness and eligibility rules frequently exclude lower earners and part-time staff. Meanwhile, only one in three policies covers employer pension contributions, leaving employers to fund any shortfall. Misaligned deferral periods and sick pay can also create income gaps that employees rarely understand, according to Hymans.
Additionally, employers are investing in financial wellbeing but most still focus on low-cost options such as discounts and webinars while employees are looking for more personalised support, such as guidance, advice and help with emergency savings. Meanwhile, nearly 40 per cent of employers offer up to four types of support despite 61 per cent of employees saying better provision would make them more likely to stay.
Hymans Robertson head of DC corporate consulting Hannah English says: “The pace of change in 2025 has been unprecedented. Rising costs, regulatory shifts and growing expectations around fairness and inclusion mean employers are under pressure to rethink their benefits strategy from the top down. That’s why we introduced our benefits survey – to give a clearer picture of how organisations are responding, where the challenges lie, and what support they need to deliver better outcomes for their people.
Hymans Robertson senior DC consultant James Smith says: “Employers have embraced modern benefit delivery, but outcomes will only improve when defaults rise, equity is embedded in eligibility, and flexibility becomes the norm.”
