Inquiry for readers: Are you partaking in salary reduction plans for various benefits?
In the current financial climate, salary sacrifice schemes have gained popularity among workers and employers in the UK. With income tax thresholds frozen, these schemes offer a way for individuals to reduce their taxable earnings below the £100,000 cliff edge, thereby avoiding the 60% tax trap for those earning between £100,000 and £125,140.
The Financial Times is encouraging its readers to share their experiences with these schemes, particularly instances where things may have gone wrong. Readers are invited to email their experiences to money@our website, with all responses treated with the strictest confidence.
Salary sacrifice schemes typically allow workers to give up a portion of their income in exchange for benefits, such as pension contributions, workplace nurseries, childcare vouchers, bicycles, and electric cars. However, some employers have introduced more unusual or innovative benefits as salary sacrifice options.
One such example is the workplace nursery benefit, where employers partner with nurseries to pay monthly or annual fees on behalf of employees, helping reduce childcare costs. Another example is the season ticket loan, which allows employees to spread the upfront cost of annual travel season tickets over instalments, easing budgeting for commuting.
Some employers also provide employee access to member discounts and rewards through group life insurance or health plans, although these are not always structured as salary sacrifice.
Beyond conventional salary sacrifice benefits, there is a discernible gap between traditional perks and what employees value today. Employees increasingly seek benefits like AI and tech upskilling, legal and tax advice, connectivity allowances, and overtime payments, which are rarely offered through salary sacrifice but could become part of future flexible benefits strategies.
Other modern benefit trends, while not typically salary sacrifice schemes, include mental health days, therapy app subscriptions, private counseling subsidies, and flexible working patterns, reflecting evolving employee priorities.
However, the majority of innovative salary sacrifice benefits remain financial or transport-related. The Institute for Fiscal Studies has calculated that from September, a parent with two children at a London nursery would need to earn £149,000 to compensate for the loss of free childcare benefits.
The Financial Times is seeking reports from readers about unusual salary sacrifice benefits offered by current or previous employers. As these schemes continue to evolve, it will be interesting to see how they adapt to meet the changing needs and priorities of employees.
Unusual or Extended Salary Sacrifice Benefits Beyond Standard Schemes:
| Unusual/Extended Benefit | Description | Source | |-----------------------------------|-----------------------------------------------------|----------------| | Workplace Nursery Fees | Employer pays nursery fees monthly/annually | [1] | | Season Ticket Loan via Salary Sacrifice | Instalment payments for annual travel passes | [1] | | Insurance-Related Member Discounts | Discounts on health/life insurance from providers | [1] |
[1] Source: The Financial Times and various research studies.
- The Financial Times invites its readers to share their experiences about unusual salary sacrifice benefits they encounter in their current or previous workplaces, as these schemes continue to evolve to meet the changing needs and priorities of employees.
- As salary sacrifice schemes progress, it would be insightful to document innovative benefits like AI and tech upskilling, legal and tax advice, connectivity allowances, and overtime payments, which are not common in typical schemes but could be incorporated into future flexible benefits strategies.
