More than a quarter (27%) of employer respondents believe that the limitations on salary sacrifice arrangements will damage employee engagement and employee relations, according to research by Jelf Employee Benefits.
Its 2017 Jelf employment survey, which surveyed approximately up to 350 employers across England and Wales, also found that 47% of respondents do not think that Chancellor Philip Hammond has given employers enough time and warning with regards to the changes, which will limit the range of benefits that attract tax advantages when offered through a salary sacrifice arrangement.
The research also found:
- 24% of respondents will need to make adjustments to their benefits package in light of the salary sacrifice changes.
- 75% of respondents do not believe employees will fully understand the limitations of the Lifetime Isa (Lisa).
- 26% of respondents expect some employees to save into a Lisa instead of a workplace pension.
- 90% of respondents believe the introduction of new saving options in the Budget 2016, such as the Lisa, increases the need for financial education in the workplace.
- 89% of respondents want greater emphasis and encouragement from the government towards the provision of employee benefits targeted at carers.
- 83% of respondents do not think their organisations are aware of all employees who act as carers in their non-work time.
Steve Herbert (pictured), head of benefits strategy at Jelf Employee Benefits, said: “Change in [the salary sacrifice] space has been widely expected for some time, yet the pace of change has taken many employers by surprise. Employers across the country will now have to spend significant time and effort considering how to react to this announcement.
“The UK already has a worrying productivity and employee engagement deficit and these figures need to be urgently improved as the country starts on the road to Brexit. Unfortunately, these changes have the potential to make a bad situation worse.”