At Enjoy Benefits, were have set up workplace benefits for hundreds of companies, catering for many thousands of employees.
And, across these organisations, one question that regularly crops up is how much any individual employee can save.
What is realistic? £20 a month? A few hundreds pounds a year? Are greater savings possible, can the savings run to thousands of pounds, even tens of thousands?
The answer is that there is no easy answer as every employee is different. Every employee has different habits, different circumstances and will sign up to a varying range of benefits.
However, that isn’t to say we can’t offer some advice. Here are some thoughts on how much any employee could save by engaging with workplace benefits.
One of the largest potential savings is from the cost of childcare.
By setting up a workplace nursery scheme, an employer partners with a local ,high quality nursery – this leads to sizeable savings for anyone who uses the scheme as nursery expenses come out as a salary sacrifice.
The savings can be enormous – a basic rate tax payer paying £1,000 a month would save just shy of £3,000 per year.
An additional rate tax payer who has nursery costs of £2,000 per year – not unheard of in London, and of course also possible with two children in nursery – would save £9,880 a year!
This is a saving of close to £10,000 from one benefit.
Of course, this saving is only applicable to those with young children but then it is only this group who have to suffer the outrageous costs of childcare in the first place. In this instance, an annual nursery cost of £24,000 would be cut to around £14,000 – this saving perhaps easing the decision for one partner to return to work.
In saying that savings of £10,000 are possible, this only applies to those who have these huge expenses in the first place. That isn’t to say that sizeable savings aren’t still possible for others.
This isn’t a plea for you to spend more money, but a simple fact of some benefits is that the more you use them, the more you save.
The Dining Card is a great example of this. With this card, you save money whenever you use it and eat out, typically the saving is two meals for the price of one across all courses, so close to a 50% reduction.
Use of this card is unlimited and so the savings will depend on how many meals out are enjoyed across the course of the year, and also the price of those meals – some pricey eateries are included, so too more wallet-friendly options.
The card itself, available as a salary sacrifice, costs less than £30 per annum and so will typically pay for itself inside one or two meals.
If an employee uses the card once a month, they might save £30 a month and so £330 a year (taking into account the initial cost of the card).
However, others might use it several times a month and also for some finer dining experiences, the savings in this case could easily reach £150 to £200 a month. The annual cost of eating out suddenly reduced by close to £2,500.
It is worth noting that some also use the card for regular lunches, offers include Pizza Hut, Prezzo and other popular chains. Eating out can become a regular lunchtime activity for employees, this also helping to bolster team bonding.
The truism that the more you use a benefit, the more you save also extends to the Discount Club – for those who spend heavily on clothes, technology and other items, the savings can be huge; for those who live a more frugal existence the savings will be useful, but not so dramatic.
Workplace Benefits sometimes lead to employees spending money they otherwise would not have spent, but in doing so they get a service of great value.
That needs a little explaining.
Let’s use health insurance as an example – many people want health insurance but find the expense a little hard to justify, the same might apply to dental insurance and policies.
Setting these up as workplace benefits means they can be paid for out of salary sacrifice, with large buying power also helping to keep costs down. An important level of cover that might otherwise have seemed unaffordable might now become more readily available.
The Will Writing service is another example – as a workplace benefit, employees get access to a reduced price will writing service, with further savings applying as the expense comes out as a salary sacrifice.
Arguably, the employee has spent more than would otherwise have been the case, but they have done so on items of great importance. The spending might also help them to save money in future, for instance medical and dental cover helping to prevent large bills for unexpected emergencies.
A large percentage of employees at any workplace want or have gym membership; a lot of employees want to cycle to work. Others have to park at work and pay for this out of their own pocket.
There are expenses we all have, things that are unavoidable. One huge perk of workplace benefits is that they can help people save money on these items they were already paying for.
Gym membership is often at the same gym they were already using, but by taking advantage of corporate rates and having the benefit of reduced national insurance contributions employees suddenly save money.
One month, membership might be £80, the next, same gym, same access, £60. What’s not to like?
This also applies to parking, cycle to work and more – employees can make an easy switch and simply save money on things they were already doing.
While some benefits are clearly measured in financial terms, others lead to improved quality of life, make life easier to manage or can even improve mental wellbeing.
The Employee Assistance Programme is a wonderful benefit whereby employees have access to a 24/7 confidential phone number they can call and then talk through any issues that might worrying them.
Confidential counselling can be available, this benefit helps employees through difficult and challenging periods in their life and helps ensure that any employer is fulfilling a duty of care.
The Holiday Exchange Scheme allows staff members to either buy or sell a week’s holiday. Some would welcome an extra week and so can buy this – working a week less, but having their salary cut accordingly. Others might not need the full holiday entitlement and so can sell a week, they work a week longer and get rewarded by an extra week’s wages.
This benefit also encourages people to think of their holiday needs in advance, ahead of the deadline to decide if they want to buy or sell (the default being that holiday remains at the standard length).
For an employer, this benefit tends to lead to fewer last minute requests and problems relating to childcare, employees can make better plans in advance.
Some employees might save thousands through workplace benefits, others hundreds and some might only have benefits that have no clear financial benefit.
What is true in all cases is that the benefits are easy to set up and maintain, this isn’t a case of a lot of admin for some financial gain, it is very little effort for some easy savings. Corporate gym membership might only save £10 or £20 a month, but that’s at the same gym for zero effort. That’s a couple of hundreds of pounds a year for doing nothing.
The savings vary depending on state of life, circumstances and how much a person spends, what is common to all is that the benefits make life that bit easier. That’s something we can’t put a definitive figure on!
At Enjoy Benefits, we have great experience in helping companies of all sizes introduce benefits that are suitable for their workplace.
Benefits are easy to set ups and ongoing administration is then run through a hub, this allowing employees to manage their own benefits while the employer can see which benefits are proving popular and what level of take-up each has had.
If you would like an obligation free chat to discuss which benefits might work for your business and your employees, please contact us by calling 0800 088 7315 or using our Contact Form.