Employee Benefits


COMPANIES increasingly see it as their role to help employees make better decisions about retirement, according to a major new survey.

8 minutes

Fifty-eight per cent of those quizzed said they would assist staff to make more informed choices in preparation for leaving the workplace.

And almost half pledged to pay for professional advice to help them plan, fresh research commissioned by Mattioli Woods plc has revealed.

With both insight questions and benchmarking data, the Mattioli Woods 2017 Employee Benefits Insight report involved interviews with 300 key decision-makers and data gathered from 2,692 companies across the UK.

Unveiling it today Alan Fergusson, managing director- employee benefits at Mattioli Woods, said: “The market has never seen so much change.

“We are now nearing the end of the initial auto-enrolment legislation that started as far back as 2012. With taxation changing, legislation targeting higher earners and news ways of saving being launched, it is an exciting time to be in the reward space.”

The survey’s headline findings include:

  • No clear understanding among bosses about providing financial education for employees, although an overwhelming majority (85 per cent) felt it was needed
  • A spike in those planning to review their existing auto-enrolment arrangements in the next year, with many setting aside budgets for the task
  • Four out of 10 employers expecting to enhance benefits packages for their workforce – with staff popularity/satisfaction the main drivers
  • Only 12 per cent had fully flexible benefits platforms which use technology to help manage and communicate employee benefits
  • More than 60 per cent of firms felt their package represented value for money, but fewer than 15 per cent knew whether staff shared the view

Mr Fergusson said: “Employers increasingly want to see a return on investment around their benefit spend, and benefits communication must improve to assist employers in achieving this.

“We believe four key words are at the heart of a good benefits package – attract, retain, motivate and engage. Hopefully, this research will allow companies to work towards a benefits strategy that delivers them all.”

The survey is available below:


Financial education:

Forty-seven per cent of employers were concerned that workers were not making adequate provision for retirement.

The majority – more than 35 per cent – felt it was the Government’s responsibility to provide the necessary financial education.

An overwhelming 85 per cent said it was something their employees would value and benefit from.

The number dropped to 42 per cent when asked if they would pay for financial advice for staff, and fell further to 36 per cent who anticipated including a cost for this in their 2017/2018 budgets.

“Employers have not completely communicated the plethora of changes (to the UK pensions landscape over the last two years) or indeed fully understood the future implications,” the study concluded.

“We see that companies who have successfully supported pension reforms have used their established direct channels to communicate and support their employees and not just depended on large-scale Government interventions which rely on people finding the right information”.

Pension benefits:

Group personal pensions (GPP) were the most widely offered pension across companies who took part in the survey (49.04 per cent).

Only 3.56 per cent offered defined benefit schemes and 2.74 per cent SIPPs.

The majority (45.42 per cent) reviewed their pension benefits every one to two years. But more than 20 per cent had no formal review plans at all.

Around 45 per cent of firms only contributed the statutory minimum of one per cent to their employees’ pensions.

“If employers are making the statutory contribution it is important to benchmark across their peer group if they hope to attract and keep the best staff,” the study warns.

“Employers should consider whether offering the minimum statutory contribution will get their people to where they need to be to avoid their business having an ageing workforce unable to retire”.

Automatic enrolment:

The majority of employers – 57 per cent – put in new pension arrangements to meet the requirements of auto-enrolment (AE).

Most (42 per cent) were supported by financial advisers during the AE process, 32 per cent by their pension provider, 20 per cent in-house and just over five per cent via accountants.

More than 70 per cent said they intended to review their arrangements over the next two years. Yet more than 13 per cent said they no plans to do this ever.

Administration proved the most challenging aspect for more than 37 per cent, while 22 per cent were concerned by the cost and almost 10 per cent the amount of time spent on the project.

The study concluded: “It is surprising that so many (more than 50 per cent) didn’t take advice on the best solutions available, especially when employers said their biggest challenges were administration and cost, as the very solutions to overcome this lie with specialist advice”.

Employee benefits:

Almost two-thirds of employers felt confident the benefits package they provided offered value for money.

More than 37 per cent used staff satisfaction levels to assess the effectiveness of their package, but almost 20 per cent had no measure in place.

Private medical insurance (almost 76 per cent) topped the list of benefits offered, followed by death in service (73 per cent), voluntary benefits (69), income protection (32) and critical illness (24).

Nearly four out of 10 employers plan to increase their benefits package. Thirty-six per cent had not considered the idea, 13 per cent said they did not have the budget to do so, and 12 per cent had already ruled it out on the grounds of cost.

“Most companies have not been making use of salary sacrifice,” the study revealed. “The majority of employers we spoke to were not aware of forthcoming changes and interestingly the vast majority were not clear what salary sacrifice was”.


523 professional, scientific and technical companies took part – the largest industry sector

£38k was the average salary of finance and insurance staff, the highest of all sectors analysed

£24k was the average pay for accommodation and food service workers, lowest in the survey

250+ - the number of staff employed by the largest group of firms providing data for the study

101-250 – the number employed by the smallest participating group of companies

10,000 phone calls were made by research staff to HR professionals during the survey period

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