What the increase in statutory payments means for your total reward
With the UK government set to raise statutory payments in April 2025, employers need to re-evaluate how they approach their benefits and total reward.
This increase is a measure by the UK government to address the rising cost of living, but it also presents a chance for companies to move beyond compliance and embrace a total reward strategy that incorporates these new statutory payments into their benefits management.
The new UK statutory payments
Statutory payments broadly refer to government-mandated financial entitlements, such as sick pay, maternity leave and parental leave benefits.
The new UK increase, which will go into effect in April 2025, includes the following changes:
- Statutory sick pay will increase from £116.75 to £118.75 per week
- Statutory maternity, paternity, adoption, shared parental, and parental bereavement pay will increase from £184.03 to £187.70 per week
- Maternity allowance will increase from £172.48 to £184.03 per week
- The national minimum wage will increase for all age groups
As the mandatory payment amounts increase, employers must find a way to embrace the role such payments have in a total reward strategy.
These changes will require companies to re-evaluate their compensation packages to maintain competitiveness, stay compliant and meet employee expectations.
How will the changes affect total reward?
Statutory payments are designed to provide employees with a financial safety net, as during these moments in an employee's life, it's important your people feel supported.
Research shows that employees who feel cared for by employers are 1.3 times more engaged, 1.3 times more loyal, and 1.2 times more productive.
But there’s also more that employers can do to support their people.
For instance, consider offering top-up pay that goes beyond statutory requirements.
For example, some companies choose to provide full pay or reduced pay for a limited time during an illness.
This not only benefits employees' financial stability but reinforces an organisation's commitment to employee well-being while enhancing the perceived value of their total rewards offering.
Understanding the value of employee benefits
The increase in statutory payments follows the trend of employee needs.
More than half of employees who are unsatisfied with their benefits want more of the benefits they already have.
However, employees often underestimate the worth of their benefits packages, which can impact engagement and retention.
This moment of implementing new statutory payments is a chance to reevaluate your total rewards strategy and show employees the true value of their benefits.
With a strong total reward strategy, companies can offer supplementary health benefits, flexible work options, or targeted wellness initiatives.
This creates a workplace where employees feel taken care of.
A total reward platform can also centralise these offerings, making it easier for employees to understand and access their benefits.
Managing total reward
Employees’ needs vary widely depending on their stage of life, career goals and personal circumstances.
A strategy powered by statutory mandates, data, and employee insights, can allow businesses to tailor their offerings and ensure their benefits meet employees' unique needs.
This kind of personalised strategy not only boosts engagement but also enhances employees’ appreciation of the full value of their compensation, which is critical for retention.
A total reward platform powered by data can help streamline these processes, ensuring companies comply with legally mandated benefits while instituting a more unified benefits strategy.
About a third (30%) of companies need more data analytics capabilities, according to our research.
To deliver a tailored total reward experience, businesses need to combine robust data with an understanding of legal requirements and employee needs.
Preparing for the future with total reward
As the April 2025 deadline approaches, employers must view these statutory payment increases as more than an obligation - they represent an opportunity for improvement.
By integrating these updates into a robust total reward strategy, organisations can meet compliance requirements while positioning themselves at the forefront of fulfilling employee experiences.
Get in touch with Benify now to learn more about how to improve your total reward offering.
In partnership with Benify
Benify offers the market's leading global benefits and total reward platform.
