6 February 2025
general
In today’s uncertain world, the importance of financial security for employees has arguably never been greater.
Indeed, unexpected events, such as illness or injury, could have a significant impact on anyone’s ability to work. In some cases, it may be impossible to work at all for an extended period. This could be a significant burden for your employees, adding unnecessary financial strain to their recovery.
Income protection insurance could help provide a crucial safety net, subsidising a portion of their income if they are unable to work due to a covered illness or injury. In fact, according to FTAdviser, research from The Exeter states that 51% of protection advisers anticipate an uptick in demand over 2025.
As a business owner, you could consider offering income protection as a workplace benefit. A valuable perk for existing employees, income protection is also increasingly becoming an important tool for businesses to attract and retain top talent, boost employee morale, and protect their operations.
Read more to find out what the core advantages of offering income protection for business owners could be, and whether you would benefit.
3 employee-focused advantages to providing income protection as a workplace benefit
From relieving financial pressure to understanding the unique needs of your workforce, there are a few key benefits to offering income protection in your business.
1.Helping your employees manage their financial security
The cost of living crisis is still a major concern for many people in the UK.
Though, according to the Office for National Statistics (ONS), inflation has remained fairly low and static since April 2024, recent high inflation rates are still affecting the cost of everyday essentials. From groceries and energy bills to rents and mortgages, many have faced increased expenses over the last few years.
What’s more, the situation is ongoing. The House of Commons Library reports that 90% of adults saw an increase in their food shopping bill in October 2024 alone. A further 72% stated that their energy bills had increased and 32% said they had seen elevated fuel prices.
This financial pressure can create significant anxiety and stress for employees, particularly if they don’t have any cover in place should they become unable to work. By providing a safety net, you could help alleviate some of these concerns and bolster their financial security.
2. Making physical health and mental wellbeing a priority
The modern workplace is undergoing a shift, with many employees placing a greater emphasis on mental health support in the office. In fact, an Acas survey recently found that 89% of employees feel their bosses should prioritise this at work.
More than that, Ciphr, a platform that works directly with HR staff, states that not only do employees value sick leave above all other benefits, mental health and wellbeing support also rank 4th out of 25 other benefit options.
This highlights the emphasis that job seekers and existing employees place on meaningful employee benefits. By offering tangible support, such as income protection, you could help make health and wellbeing a core ethos of your business.
3. Encouraging a productive workplace and positive business culture
People Management recognises that healthy employees tend to be more productive and engaged and that forward-thinking employers have a genuine interest in employee health.
Committing to health and wellbeing by providing income protection could help build a stronger business culture and make your employees more powerful advocates for your brand.
On the other side of the coin, financial stress can contribute to poor health, and Mental Health First Aid England reports that financial stress negatively affects more than half of UK employees’ work performance. The link between financial health and mental wellbeing is clear, with 80% of those facing financial pressure also experiencing symptoms of anxiety or depression at least once a week.
You could help alleviate some of that financial stress, potentially contributing to a more effective and committed workforce, by offering income protection.
Improving morale and retaining talent: 3 business benefits of offering income protection
Here are just a few ways that offering an income protection benefit could be advantageous to your business.
1.Attracting and retaining top talent
In today’s competitive job market, attracting and retaining top talent is vital.
Income protection is a valuable employee benefit that can significantly enhance a company’s appeal to potential hires. By demonstrating a commitment to wellbeing and financial security, potential employees could be keen to join a business that’s willing to prioritise their needs.
Moreover, offering this benefit could also increase employee loyalty and reduce turnover, saving the company time and resources.
2. Boost employee morale and productivity
As mentioned, financial stress can have a detrimental effect on employee morale and productivity.
When employees are constantly worried about their finances, it can, understandably, be difficult to concentrate on their work. Income protection could help alleviate some concerns, allowing space for your employees to focus on their tasks and be more productive.
Reduced stress could also lead to improved morale, increased job satisfaction, and a more positive and engaging work environment.
3. Mitigating the cost of income protection with salary sacrifice
If you’re concerned about the potential cost of income protection to your business, consider offering it as part of a salary sacrifice programme.
Doing so could reduce your company’s Corporation Tax and National Insurance (NI) bills, as protection benefits are usually considered an allowable expense. Your employees could experience tax advantages too.
How to choose an income protection plan for your employees
Choosing the most appropriate income protection plan for your employees means assessing not only their needs but your operational requirements as well.
Points to consider for income protection include:
Each business will have different needs. This highlights the importance of expert advice. Not only will a financial planner have access to a wide array of plans, but they’ll also be able to offer valuable guidance throughout the process. Moreover, as your needs change, your planner can help you adjust.
Get in touch
If you’re a business owner looking to add extra value through income protection as a benefit, please get in touch. Email enquiries@jesellars.co.uk or call 01934 875 919 to find out more about how we can help you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
The Financial Conduct Authority does not regulate tax planning.
