5 employee benefits trends to watch in 2026

2026 is shaping up to be a year of tough choices for employers.

New research from Avantus’ parent company, Ciphr, shows that 96% of employers expect the year ahead to be challenging, underlining the scale of pressure facing organisations across the UK.

Rising costs, escalating employee expectations, preparation for the upcoming Employment Rights Bill, alongside AI and rapid technological change, are reshaping how benefits are designed, delivered and valued.

Based on the survey of 300 HR professionals, the message is clear: employee benefits have moved from the margins to the mainstream, becoming a core pillar of workforce strategy, organisational resilience and employee experience.

Here are the five benefits trends set to define attraction, retention and engagement in 2026 - and what HR leaders can do now:

1: Personalised, well-communicated benefits move to the heart of the EVP

The era of generic benefits packages is ending. Almost half (46%) of HR leaders say offering a strong range of employee benefits will be a top priority in 2026, ahead of fair pay, work-life balance and flexible working.

What’s changing: Benefits are shifting from supplementary perks to strategic levers for attraction, engagement and retention. With limited headroom for pay growth, relevance and communication matter more than ever.

How to respond:

Introduce choice-based benefits plans that reflect different life stages
Offer lifestyle spending accounts (LSAs) for wellbeing, development or mental health
Provide customisable health options and learning budgets
Invest in clear, consistent benefits communication

Why it matters: Strong EVPs will increasingly be defined by the quality, clarity and personal relevance of benefits, not just the breadth of the offering.

2: Holistic wellbeing benefits support career sustainability and retention

Recruitment (29%) and retention (28%) remain employers’ biggest people challenges, making benefits a critical point of differentiation.

What’s changing: Employees are increasingly assessing employers on their ability to support long-term wellbeing, career growth and life outside work, not just immediate reward.

How to respond:

Strengthen mental health and wellbeing support
Invest in learning and development benefits
Enhance family-friendly and carer policies
Go beyond gym memberships with preventative health support
Provide financial wellbeing tools, guidance and savings support

Why it matters: Benefits that support career sustainability and quality of life help reduce unwanted turnover and strengthen employer appeal in tight labour markets.

3: Value-led benefits move centre stage as cost pressures rise

Cost pressures remain intense, with 27% of HR leaders citing rising costs and budget shortfalls as a key concern for 2026.

What’s changing: The focus is shifting from volume to value, as employers look to maintain meaningful benefits without increasing overall spend. Salary sacrifice continues to play an important supporting role, helping employers sustain or enhance core benefits such as pensions, £500 tax-free financial advice and electric vehicles, without increasing employment costs. At the same time, low-cost, high-impact options, including flexible working, wellbeing support and voluntary employee benefits platforms offering discounted, opt-in benefits, are gaining traction.

How to respond:

Prioritise salary sacrifice for high-value benefits such as pensions, EVs and cycle-to-work schemes
Use voluntary benefits platforms to offer discounted opt-in benefits, including health cash plans and lifestyle discounts

Why it matters: Sustainable benefits strategies will increasingly be judged on impact, affordability and perceived employee value, not the number of benefits offered.

4: Flexible working benefits evolve into broader work-life support

Flexible working is now a baseline expectation, but the definition of flexibility is expanding.

What’s changing: Employees increasingly see flexibility as autonomy, balance and personal sustainability, not just where work happens.

How to respond:

Support flexible hours and workload management
Enhance leave policies and wellbeing provision
Embed flexibility into organisational culture
Consider remote and hybrid work, compressed weeks, flex time and job sharing

Why it matters: Work-life support is a core driver of engagement, wellbeing and retention.

5: Inclusive benefits aligned with culture and fairness gain importance

Benefits can no longer operate in isolation from the wider employee experience. Alongside benefits, employers are prioritising:

Positive and respectful workplace culture (45%)
Work-life balance support (45%)
Training and development opportunities (42%)
Fair and equal treatment for all employees (41%)
Job security (40%)

What’s changing: There is growing recognition that benefits must reinforce organisational culture and values. Standalone or transactional benefits programmes are losing impact.

How to respond:

Design integrated benefits ecosystems
Align benefits with culture, inclusion and development goals
Ensure benefits are accessible, inclusive and fairly distributed
Consider inclusive parental leave, fertility support, culturally relevant benefits and disability support

Why it matters: Benefits that reflect organisational values build trust, strengthen engagement and support long-term loyalty.

From expansion to intent

This year employee benefits are shifting from expansion to intent. With costs rising and expectations higher than ever, success will be defined by the value benefits deliver, not the volume offered.

For HR and benefits leaders, the opportunity lies in sharper design, stronger alignment with business strategy and closer integration with culture and employee experience. Technology will continue to play a critical supporting role, with accessible, one-stop platforms helping employees understand, choose and engage with increasingly personalised benefits, and ensuring well-designed offers translate into real-world value.

Ultimately, the benefits strategies that succeed will not offer the most, but the right benefits, delivered in the right way, at the right time.