Press release 1 April 2025.
As employers brace themselves for hikes in National Insurance contributions (NICs) on 6 April 2025 and the reduction in the threshold at which they are due, the industry body for the group risk sector, GRID, has found that over a quarter (28%) of senior HR decision-makers believe that increased costs imposed by government such as higher employer NI contributions will present a significant challenge to their business in the next 12 months. Broken down by size of company, 30% of SMEs1 see this as a challenge, compared to 25% of large corporates1.
In the same research, conducted in January 20252, 38% of senior HR decision-makers said that not having enough budget is the main factor holding their business back from doing more regarding employee benefits. Broken down by size of company, 42% of SMEs see this as a challenge, compared to 30% of large corporates.
GRiD is concerned that NI increases and other financial challenges may put undue pressure on employers and it’s crucial they understand the value of their benefits package and support so that they’re not tempted to cut expenses and thus jeopardise staff wellbeing. Ensuring that staff are happy, healthy, and at work, is good for the employer as well as for the employee.
Katharine Moxham, spokesperson for GRiD said: “Employers will understandably be looking at their budgets in all areas to manage the additional NI contributions and other financial pressures. It’s unlikely that HR will be exempt from the tightening of purse strings, so they must prepare to demonstrate the effectiveness of their employee benefits programmes to retain the maximum possible budget for them.”
What do effective employee benefits look like?
Ideally, employee benefits need to provide preventative, early intervention, in-the-moment, and long-term support to ensure they meet the needs of all employees. This needs to be across all four pillars of health and wellbeing including financial, physical, mental and social health.
GRiD explains that employer-sponsored group risk benefits: life assurance, income protection and critical illness, offer a broad and ever-growing range of tools and solutions which meet the requirements above. Such is the effectiveness and wide range of support available, offering a group risk benefit may also reduce the need for other types of employee provision.
As employers are going to have to accommodate NI and other increases, they need to look for employee benefits that do more with less. Some employee benefits can be expensive, however, others can provide excellent value. For instance, Group Life Assurance (GLA) costs on average as little as £15 a month per employee and Group Income Protection (GIP) costs on average £28 a month per employee3. In the era of NI increases, such employee benefits may well be some of the most cost-effective. This will be particularly welcomed by those who are tasked with finding savings, while HR teams can be assured that the support offered is comprehensive.
Katharine Moxham concluded: “Group risk benefits are some of the most highly-valued types of employee benefits and rightly so, as they provide so much support for employees and employers alike. However, jeopardising the health and wellbeing of staff by making radical cuts will put the wellbeing of the organisation itself at risk too, so utilising benefits that provide comprehensive support and that are cost-effective will be the way forward.”
1.
Definitions: SMEs 1-249 employees, large corporates 250+ employees
2.
Employer research was undertaken by Opinium from 7-15 January 2025 among 500 HR decision makers from UK companies.
3.
Swiss Re Group Watch 2024
For further information please contact:
Ali Cort
SMUK Marketing and PR
Mob: 07887 484247
acort@smuk.org.uk
Katharine Moxham
Spokesperson for GRiD
Mob: 07887 512508
Katharine.moxham@grouprisk.org.uk
Notes for editors
About GRiD
Group Risk Development (GRiD) is the industry body for the group risk sector, promoting the value to UK businesses of providing financial protection for their staff, enhancing their well-being and improving employee engagement. Our membership includes insurers, reinsurers, intermediaries and those operating in (or with other interests in) the UK group risk market. Together this forms a collective wealth of experience built over many years. Under the chairmanship of Colin Fitzgerald (Distribution Director – Group Protection, L&G Retail) GRiD aims to promote group risk through a collective voice to Government, policymakers, stakeholders and employers.
GRiD works with government departments and regulators involved in legislation and regulation affecting group risk benefits, and with other organisations involved in the benefits and financial protection arenas. GRiD also seeks to enhance the industry’s standing by encouraging best practice and by participating in industry-wide initiatives such as the professional qualification in group risk managed jointly with the Chartered Insurance Institute.
GRiD’s media activity aims to generate a wider awareness and understanding of group risk products and their benefits for employers and employees.
GRiD’s dedicated spokesperson, Katharine Moxham, provides expert media comment on a full range of group risk issues.
Follow Katharine Moxham on Twitter @KMoxham
