The UK Budget, salary sacrifice and benefits communications

The increase in Employer’s National Insurance liabilities, coming into effect in April 2025 following the autumn Budget, increases the tax burden for employers. With an increased rate of Employer NI and lower starting threshold due to come into effect next year (rate rising 1.2 percentage points to 15% and starting threshold dropping from £9,100 per year to £5,000), there’s a greater impetus to demonstrate an improved return from your investment in benefits. 

A new emphasis on salary sacrifice 

Increasing uptake of salary sacrifice benefits, with Employer NI savings attached, has always been a key focus for the managers of UK employee benefits schemes. These savings provide crucial funds, will be part of your regular reporting and can often form the foundation of any business case you take to your organisation as you seek to develop your offering.  

So, what’s the best way to maximise the savings you drive from your benefits scheme, especially in light of the increase in Employer NI? 

Tell people about it. It may sound simple, but time and again our customers prove that even a relatively small investment in strategic communication can exponentially increase benefit take-up, and thereby improve their overall return on investment. In many cases, even at the current, lower rates of Employer NI, the investment has repaid itself several times over. 

The business case for improved communication has never been stronger. 

Improved communication: success stories 

Inevitably, the ways in which our customers begin increased communication of their reward offering will vary. They might introduce some year-round wellbeing emails, targeted educational content, a pension savings campaign, social media posts, webinars, videos, mailouts, merchandise… We work with customers with diverse audiences, channels, benefits and priorities – their approaches differ. 

But the value of having a proper plan – including strategic background, measurable objectives, and a calendar of regular, high-quality communication across appropriate channels – never changes. One Benifex customer, who recently introduced additional, multi-channelled communication activity in the run-up to and during their enrolment window, saw striking results. Despite not making any changes to their offering and seeing no significant headcount change, more than 75% of employees submitted benefits, and the customer’s Employer NI savings increased by 97% compared to the same period the previous year. Their overall return on investment for that additional communication spend was more than 2000%.  

Maximising value-perception 

There’s more to communication that just driving immediate action. It also plays a crucial role in tackling one of the biggest challenges facing reward teams: value-perception. Strategic communication campaigns with carefully-considered, targeted messaging help support awareness of the real-life value of benefits.  

Communication is also essential in supporting understanding of any forthcoming changes. For example, if your organisation, in response to the Budget, decides to alter its employer pension contributions (which remain exempt from Employer NI), then explaining and contextualising this effectively to employees will be crucial. There’s no other way to ensure clarity and appreciation. 

Likewise, the pressure that’s bound to fall on budgets previously allocated for pay increases is likely to lead to difficult conversations with employees. In this context, clearly communicating the full value of employees’ existing total reward (and its employer contributions) is more important than ever. 

Highlighting the value of total reward drives a whole host of positive outcomes – 40% lower employee turnover, 18% higher productivity, increased profits and stronger growth. But none of this can be achieved without a properly thought-out strategic communications plan. 

The 2024 autumn Budget has created some fresh challenges for employers, but from a reward perspective, many of the solutions are already in your wheelhouse. Now is the time to act.