The UK Autumn Budget: 3 key opportunities for benefits education
On 30 October 2024, Chancellor Rachel Reeves delivered the first Labour Budget in 14 years, introducing a £40 billion increase in taxation, much of it earmarked for the struggling NHS.
While the 165-page HM Treasury paper reveals the finer details, the impact on individuals’ finances is already clear.
In this context, employee financial education is more critical than ever.
As people grapple with higher taxes and unchanged financial pressures, employers have a unique opportunity to help their workforce understand and maximize the value of their benefits.
Below, we’ve identified three key opportunities to help your people through financial education and support.
1. Salary and bonus sacrifice
There had been speculation that employer pension contributions would become subject to employer National Insurance Contributions (NICs), which would have significantly reduced the incentives associated with salary and bonus sacrifice arrangements.
Although this change didn’t occur, the government has increased employer NICs from 13.8% to 15% starting in April 2025.
As such, salary sacrifice programmes continue to represent a valuable opportunity.
For example, a recent project with Mondelez demonstrates that, with financial education support, there was a 180% increase in the number of people utilizing the bonus sacrifice scheme and a 262% increase in the total amount saved.
2. Corporate ISAs and changes to Capital Gains Tax
Capital Gains Tax (CGT) has been increased with immediate effect: from 10% to 18% for the lower rate, and 20% to 24% for the higher rate.
Importantly, the adult ISA annual allowances remain unchanged at £20,000 (£4,000 for Lifetime ISAs and £9,000 for Junior ISAs).
Since ISAs are exempt from CGT, this creates an opportunity for companies to offer their people a corporate ISA.
Financial education can support this by providing information on topics such as:
- How to plan for a future event
- Cash or stocks & shares ISAs
- Understanding asset classes
- Assessing attitude to risk
Combining personalized financial and benefit education is key, as illustrated by BNP Paribas.
3. Changes to pension death benefits
While still under consultation, the UK government has proposed changes to pension death benefits beginning in 2027.
This would make pensions part of an individual’s estate for inheritance tax purposes.
Although we await further details, these changes could potentially impact death-in-service benefits, depending on how they are structured.
These are significant updates that will require careful explanation to employees.
While we await the outcome of the consultation, employers can support employees with financial education in the following ways:
The importance of having a will, along with promoting your will-writing service (if applicable).
The importance of updating your beneficiary forms.
An explanation of inheritance tax and guidance on effective planning.
Education on the key features of your company pension, such as the tapered annual allowance.
Siemens demonstrates the impact of educating the workforce about its corporate pensions, resulting in 30% of employees increasing its contributions by one-third.
Get in touch with us to explore how we can help your workforce better understand and utilize relevant benefits in the wake of the latest UK Budget changes.
In partnership with Nudge
A leading financial wellbeing benefit using behavioural science & technology to help employees.
