Employers plan on getting their employees to take on the costs of health-related support services for themselves through salary sacrifice, according to research from Canada Life.
The change of approach has been prompted by yesterday’s increase in employers’ National Insurance contributions (NICs) which have increased from 13.8% to 15%.
The level at which employers start paying NICs (the secondary threshold) has also reduced from £9,100 to £5,000 per year.
Research conducted by Opinium, March 2025 on behalf of Canada Life among 550 HR decision-makers found 15% of those polled will encourage employees to pay for insurance health-related support services for themselves through salary sacrifice.
It also found that six out of 10 small to medium-sized employers (SMEs) will change their approach to insurance-based employee benefits due to the increase in employer National Insurance contributions.
More than six in 10 (61%) of companies will change their approach to insurance-based employee benefis, to cut costs, though 23% said they intend to make employee benefits work harder as they will raise awareness of what’s already available.
The research also showed 22% of SMEs said they will cut employee benefits available, 18% will change what’s offered to cut costs and 5% of SMEs said they will stop providing any employee benefits.
But it is medium-sized companies, with 50 to 249 employees, who are more likely to reduce or change benefits, according to the survey.
Just 27% of micro employers (one to nine employees) questioned say they offer insurance-based employee benefits.
The research found the most popular employee benefits offered are group life insurance (29%), private medical insurance (27%) and annual health checks (26%).
One in five firms (20%) said they cover employees for group critical illness in case they’re seriously ill, while 16% of firms provide access to an occupational health service that could help them back to work following sickness absence and 14% cover employees in the event of ill-health with group income protection.
Chris Morgan, head of product and proposition strategy, protection at Canada Life, (pictured) said: “Our findings show that under increasing cost pressures, many SMEs are reviewing the employee benefits they provide to find savings.
“Given their knowledge of the positive impact these benefits have on employee health and business productivity, workplace protection advisers are well-placed to support firms and ensure any changes are carefully considered.
“We know as an industry what a positive impact employee benefits can have on financial, physical and emotional wellbeing.
“It’s important that insurers and advisers work together to demonstrate this value and bring it to life for SMEs, so they can see why continuing to invest in employee wellbeing should remain a business priority.
“It is encouraging that some employers already recognise the importance of employee benefits in business success, as 39% are not planning to make any changes.
“Of the six in 10 who are planning changes, more than a third plan to boost awareness and engagement in the benefits provided, rather than reduce provision.
“With the Mayfield Review underway, the need for government, insurers, experts and businesses to work together to solve health challenges in the workforce has never been greater.”
