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Pensions and shares ‘most popular employee benefits’ in North East

Long-term savings such as pensions and share schemes are the most popular rewards offered by North East employers, a PwC survey shows.

A PwC survey of employees in the North East ahead of the new pension flexibilities from April reveals that most respondents say that when it comes to employee benefits they place greatest value on tax efficient savings such as pensions and share plans. Interestingly, however, while many would use a one off windfall to fund such benefits, surprisingly few would give up current salary for them.

Which are the most highly valued benefits?

When asked which are their two most highly valued employee benefits, 50% of respondents in the North East opted to participate in a company share scheme while 47% would choose contributions to their pension pots.

How would employees spend a £500 windfall?

When it comes to using a one-off extra £500 to spend on existing workplace benefits, extra holiday leave is the most popular for North East employees (19%) with only 12% choosing to use it to contribute to their pension, despite it being the second most valued benefit and much lower when compared to other UK regions like Yorkshire (31%) and Scotland (29%).

Only 11% would elect to take the additional cash and invest it in their share plan.

This suggests that while employees say that they value pensions and share plans most highly, when they are offered a discretionary one-off payment to fund additional benefits or take as cash, the picture is more finely balanced. In addition many employees chose more time off work, showing that most respondents are balancing short-term consumption with longer term financial planning.

Would employees give up salary for greater benefits?

The importance of cash over benefits increases further when North East employees are offered the opportunity to exchange 5% of their pay for a new employee benefit. In this scenario 47% say they would not sacrifice their existing salary for any benefits but would prefer to maintain their cash, though this is significantly lower than other UK regions such as the North West (69%) and Yorkshire (69%).

The findings suggest that people recognise the need to save for the long-term and when asked say that they value pensions and share plans over immediate consumption. However, most people would not give up a portion of their existing salary for any other benefit, suggesting that they have little room for manoeuvre within their existing reward packages. The extent to which they value benefits also varies by gender, age, the region in which they live, and industry in which they work.

John Harding, PwC’s pay, performance and risk leader in the North, said: “Our research highlights that people recognise the importance of benefits that help with long term savings, however, cash is still king and employees are unlikely to give up cash for tax efficient benefits.

“Reward is by no means a one size fits all and preferences vary considerably between employee demographics. Employers should target their benefits spend accordingly, otherwise they risk spending valuable resources on benefits that are not valued appropriately by certain segments of their workforce.

“Employers should also communicate the benefits they offer and allow employees the opportunity to use bonuses, variable pay elements and pay awards towards their benefits package rather than simply giving up existing pay under Flexible Benefit schemes.”

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