Expert perspective: UK employers are increasingly offering insurances and risk-based benefits

The UK benefits landscape is evolving rapidly, driven by increased pressure on public health services and rising financial concerns due to the cost-of-living crisis. More than ever, employers are stepping into a paternalistic role, providing essential support to employees by optimising their benefits offerings. 

By enhancing insurance and risk-based benefits, employers are creating a safety net that helps employees navigate gaps in state support. These moves not only protect employees’ financial and physical wellbeing, but also drive engagement and improve understanding of available benefits. A key trend emerging from this shift is the growing rate at which UK employers are implementing income protection and critical illness schemes within their benefits strategies. 

Why group income protection and critical illness cover are gaining momentum 

In the UK over the last year, increasing numbers of employers have sought out group income protections as a way to cover some of the shortfalls that employees are experiencing in state support, particularly around mental health. One in four people have experienced a mental health problem in the last year, according to UK charity MIND, but with the strains on health services, it is becoming incredibly hard for people to get the support they need. 

With a group income protection scheme, employers can provide access to a wide range of different services and essential support – such as counselling, employee assistance programmes (EAP), and mental first aid courses. When embedded into the company ethos – and rolled out in a coherent, informative way – group income protection can be an incredibly powerful tool.  

We’re also seeing a significant uptick in companies offering critical illness protection. Employers are taking advantage of pre-built, off-the-shelf products which give employees tax-free financial support when they need it most. Critical illness is particularly useful for employees that don’t have private medical insurance; they can access a lump sum of money to navigate around NHS queues, to seek out private medical care or cover everyday expenses.  

How flexibility in benefits can help employers meet diverse employee needs 

At a broader strategic level, employers are recognising the merits of offering flexibility of choice within their benefits provision to meet diverse employee needs. Most companies can’t afford to be consistently rolling out exciting new benefits. But if they can provide a range of salary sacrifice benefits which are cheaper than those available on the high street and directly meet the needs of employees, it can be game changing.  

Flexibility empowers employees to take control of their financial wellbeing, which is especially important in today’s uncertain economic environment. By offering a mix of cost-effective, high-impact benefits, employers can deliver a benefits package that feels personalised and responsive, ultimately driving better participation and overall satisfaction. 

For more practical advice and learnings on all things reward and benefits, download our report: Navigating trends from our Big Benefits Report, where six Benifex experts share their perspectives.