With national minimum wage rates set to rise – what can employers do to enhance benefits?
In April 2025, employer National Insurance Contributions (NIC) will increase to 15%, and the National Minimum Wage will rise by 6.7% to £12.21 for people over 21 and by 16.3% to £10 for 18-20-year-olds.
The headlines have been full of large businesses in the most heavily impacted industries – retail, manufacturing and hospitality – announcing potential cuts.
Nationally, experts suggest that salaries may freeze, and any increases may be capped at 3%, which is less than we’ve seen in recent years.
Importance of employee benefits
With concerns that inflation may also increase, employees face continued high living costs.
Some employees won’t receive a pay rise, but there are at least two vital reasons for finding ways to enhance your employee benefits offering.
Labour and skills shortages: We’re in a tight labour market, and some sectors are crying out for the right talent and skills needed to help their business grow.
Talent retention is a top HR priority for 2025, and employers must take steps to support this strategy.
If you’re not offering the highest salary, your workplace culture, employee benefits offering, and overall employee value proposition (EVP) must be strong enough to give employees a reason to stay.
Employee financial wellbeing: When the cost-of-living crisis peaked, financial wellbeing benefits dominated EVP conversations.
Benefits, once considered a perk of the job, became a lifeline for many employees, stretching their salaries further by making life more affordable.
If prices increase in response to business overheads soaring, it’s the people who will feel it.
Financial wellbeing benefits can bridge the gap, especially when pay increases aren’t available or cannot keep up with rising costs.
Employee benefits help you retain talent and enhance employee wellbeing, but it’s essential to be mindful of the financial pressures on businesses.
Cost-saving employee benefits
Pluxee UK has just released its Budget-Busting Employee Benefits Strategy Guide, giving CEOs, CFOs and HR professionals a tangible strategy to help their businesses thrive in 2025 and beyond.
Pluxee UK’s strategy focuses on using the significant savings tax-efficient salary sacrifice schemes can deliver to your business.
The government has set out clear plans for electric vehicle uptake, and by far, the most cost-effective way for an employee to take on an EV car is through a salary sacrifice scheme.
As an incentivised scheme, employees save on tax and NIC, and employers reduce their class one NI contributions.
The same is true of a cycle-to-work scheme, but if your goal is to make significant savings, a green car scheme is where you’ll find them.
To remain attractive to top talent, a competitive EVP is vital – use these NIC efficiencies to lower your wage bill and reinvest in your EVP.
Stretching employees’ salaries
If pay increases aren’t part of your 2025 people strategy, then a more comprehensive employee benefits package must be.
Beyond the importance of attracting and retaining talent, you may find your employees once again struggling to manage rising living costs.
In its blog, How to support your employees during the cost-of-living crisis, Pluxee UK details the impact financial wellbeing benefits have on making everyday living more affordable.
When employees are worrying about money or their quality of life deteriorates, their stress levels will rise.
Excess stress can eventually lead to burnout and other physical illnesses.
Build a winning EVP to thrive in 2025
Employee benefits are more critical to your people and business than ever, but so is embracing a strategy that uses money-saving schemes to cover the cost of implementing them.
A return on investment is also essential, so partnering with a provider that can consolidate your solutions, reduce admin and increase employee participation are all part of a winning formula for your people and business.
In partnership with Pluxee UK
Pluxee UK, is a leading employee benefits and engagement partner that opens up a world of opportunities to help people enjoy more of what really matters in their lives.
