Employee benefits will face scrutiny in 2025 as the 2024 Autumn Budget’s higher NI contributions and minimum wage prompt tighter budgeting, according to Grid
The group risk industry body has stated that cautious budgeting would be required due to the increase in minimum wage and employer National Insurance (NI) contributions, which will take effect in April 2025.
Employers are expected to increasingly seek higher returns on their investments in employee benefits. According to Grid, benefits are more likely to be provided or maintained if they show high employee engagement, excellent utilisation, and a definite business advantage.
Additionally, Grid predicts that by 2025, benefits that provide quantifiable and transparent value will be among the most sought-after. Benefits for group risk, such as income protection, critical illness coverage, and employer-sponsored life insurance, are anticipated to be particularly noteworthy. These are valued not merely for their improved features but also for the financial stability they give workers in times of need. These include preventive, early intervention services that address emotional, physical, and financial health issues and assistance in going back to work.
Grid spokesperson Katharine Moxham says: “We would urge all employers to ensure they fully understand the benefits that they currently offer, to monitor their use, and ensure employees are aware of the breadth and depth of support available. Where benefits are shown to be effective they will be retained. However, many companies will be looking to make savings to account for the increased costs of employing staff. As a result, benefits will be at risk if there is not sufficient evidence to support their continuation.
“HR teams should start to gather the data they need now, to put forward the business case for the benefits that support the welfare of staff. They need to show not only uptake of benefits, but also the positive impact on the business itself. However, this also represents a great opportunity for the HR department to demonstrate its accountability and commercialism.”
