A Little Bit Richer

This series is brought to you by L&G, helping you build a future that's A Little Bit Richer.

Iona Bain: Hello, and a very warm welcome back to A Little Bit Richer with me, Iona Bain, where we dive into the money decisions that shape your future, brought to you by Legal & General. I think we can agree that many of us just don't really notice or appreciate the benefits that are available to us through our employers, whether it's pension savings, private healthcare, discount vouchers, even free gym membership, lunch, nap pods for a lucky few. Are you aware of all that's on offer? If so, are you fully utilising it?

Iona Bain: Joining me today for a chat about all of this is Jodie Greenway from L&G. Jodie works in the benefits team, and so she's in a great position to help guide us through the perks that your employer might offer. Some benefits have got great tax advantages, too. We really want to make sure that you understand the value and that you're making informed decisions to get the most of everything that may be on offer. Welcome, Jodie. 

Jodie Greenway: Thank you, Iona. 

Iona Bain: Jodie, to get us warmed up, can you explain in 30 seconds or less why it's really important to understand all the perks your employer has to offer? 

Jodie Greenway: They could be huge benefits that you're missing out on. If there's no awareness, how are you going to know what's available to you? How are you going to know how much money you could be saving, how much better off you could be? Your company might have negotiated some extra discounts that could be super important. How are you going to know how you're going to prepare yourself for the future for things like retirement? For me, the biggest answer is go and find out, go and prepare yourself. If you don't, unprepared is unarmed. Hopefully, that's 30 seconds or less.

Iona Bain: You actually did it in about 25 seconds. Good work. Yeah, very punctual. That's a lovely overview, actually, and it gives us a really good starting point for our conversation. What's the standard package of benefits that UK employers have to offer? 

Jodie Greenway: The standard offering for a full-time member of staff would be things like annual leave. There's an annual leave expectation of 28 days a year, minimum. On top of that, you would get public holidays. There's statutory sick pay, parental leave that covers maternity, paternity, potential adoption times that are needed. There's also the enrolment into a pension, so 5% of your salary. That's auto-enrolled, and your employer then pays 3%.

Iona Bain: Even on this basic stuff, employers can differ quite a lot. What would you recommend for people who want to know more about what their employer has to offer?

Jodie Greenway: I think there's two things they can do. The first is to go onto the government website, which actually tells them what should be available for them as a statutory requirement. But actually, going onto their own company website to understand exactly what's available to them, most companies will have a reward package that you can explore. 

Iona Bain: We've talked about the basics that an employer has to offer, but of course, many employers do go above and beyond that. Can we talk about what's available to help with your longer-term finances?

Jodie Greenway: Pension savings is something that supports the longer-term finances. You have to contribute a minimum 5%, you're auto-enrolled, your employer will contribute the 3% on top of that. That's 8% towards your pension savings. Some will actually provide higher rewards if you put more in yourself, so it's worth exploring that. There's also things like workplace cash ISAs, stocks and shares ISAs. There's also things like share saves that might be available. Some companies might offer employee share matching. If you buy some, they also match. Some companies will offer bonuses, potentially paid over time. All of these things can factor in. If companies do offer bonuses, sometimes they might offer for you to be able to take that in a share-save initiative so that it's more tax-efficient for you.

Iona Bain: We do sometimes hear experts talk about the wisdom of maybe putting your bonus into your workplace pension as well, because that way it's just a nice, easy way to top up your pension without you really noticing it.

Jodie Greenway: Absolutely. The tax benefits come along with that because you're not taking the cash element.

Iona Bain: That's a very good hack. Let's talk about the landscape of employee benefits. Why do employers offer benefits? Do people typically realise what's available?

Jodie Greenway: I'll start with the answer to the second part of that question. Totaljobs actually did a survey which worked out that 50% of employees understand what's available to them, which I suppose, more worryingly, then 50% don't. Some of the perks around well-being, about learning and development opportunities, they were actually some with the lowest awareness, and they're probably the things that are the most impactful to people.

Jodie Greenway: But coming back to the first part of the question in the why, companies will use this to attract and retain employees. Some things may be more beneficial to others. You might have, for instance, some companies that employ lots of younger people that might be more interested in perks that might be available to them, such as a free coffee every week or additional leave for a birthday or things that matter to them. You might find that some workplaces look to attract more mature staff members, and actually they might be looking for different perks that come along with that. Things like free eye care and health checks.

Iona Bain: Does it also depend on the size of the organisation as to whether it offers a generous benefit package or not?

Jodie Greenway: Usually, it will. The size of the organisation will depend on them being able to negotiate better rates for some of the perks that they might offer. But it doesn't mean that you're hard done by in any way because smaller companies might be able to offer more of a bespoke offering to their employees. It's just important to understand exactly what's available.

Jodie Greenway: When you look at the company offering, a lot of people will go instantly to salary mode. How much is it going to pay me? But actually, they don't look at the wider picture. How much is it going to benefit me financially when I look at actually how much they're going to pay towards my pension? How many discounts are they going to give me for things that I might use every day, like childcare, for instance, that is quite costly?

Iona Bain: In your view, do people think about that stuff enough when they are considering what workplaces to go and work for?

Jodie Greenway: I don't think so. I think people see value, the cost of living. Times are tight for everyone, right? Instantly people see a pound sign and assume that that is going to be the total overall package and what is going to benefit them. I don't think people necessarily tend to think wider down the line and actually put a value on how beneficial the whole package could be. There could be additional items that actually mean that your salary is topped up much more with the additional benefits that are available to you.

Iona Bain: It's about looking beyond the salary and thinking about all of this more holistically. Are there certain workplace benefits that might not mean that you get a higher salary but will come with tax advantages that are worth considering?

Jodie Greenway: Definitely. Salary sacrifice is a big one there. To explain what salary sacrifice means, there's an ability for you to sacrifice part of your salary before any tax outgoings that will allow you to pay for things like cycle to work schemes, things like childcare vouchers, things that might help you in the day-to-day travel and tech loans for equipment, et cetera. There's also things like electric car leasing. There could also be things like legal costs covered and support for things that you might not face every day, but when they crop up might be really helpful.

Iona Bain: Also, I'm hearing about more employers offering things like salary advance. When can that be useful?

Jodie Greenway: Salary advance is a real big help for people. Some people live pay cheque to pay cheque, and that means that if you have got an unexpected bill or something that hits you all of a sudden, you've got that ability to reach out and request for some assistance in a financial form before your salary is due to be paid to you. That can be really beneficial for a lot of people. We're seeing a lot more uptake in that.

Iona Bain: What benefits might be offered around achieving a good work-life balance?

Jodie Greenway: There's flexible working, meaning that you can change up your days, change up your shift patterns. There's other options such as remote working, hybrid working. Since the days of COVID, things have changed. Things have become easier to do from home. That's really beneficial to some people, especially if they've got childcare arrangements, drop-offs, pick-ups, et cetera. There's also things like extended sabbatical leave. There's a multitude of things out there.

Iona Bain: Often in life, we need extra time off for things that could be really important, like birthdays, wanting to go and study, maybe having to take on caring duties. Do you think employers are becoming more and more aware of that and are offering leave for those life events?

Jodie Greenway: There's already some employers will offer an ability to purchase extra annual leave, but I am aware of some employers that actually give birthdays off as a perk of the job. There's some rules around it, sometimes around when you can take it, but just to know that you've got that time set aside at a time that's important for you and your family is really key.

Iona Bain: What about perks that can support your health and well-being?

Jodie Greenway: This is probably my favourite perk to talk about. The biggest one for me is definitely from a private medical point of view. Some companies will offer a private medical support. We know how pressured our own health services are at the moment, so I feel like that's an invaluable tool. There's other things such as free eye checks. There's potential on-call GPs that some companies offer as well. There's also dental cover. There's also things like free gym memberships or discounted gym memberships that might be available. Some companies even offer a gym on site in their places of work. There's many things to think about.

Iona Bain: Are there some quite creative workplace benefits that you're seeing that people might not necessarily think of when they hear the term workplace benefits?

Jodie Greenway: I guess it depends on the workplace. Some of the workplaces I've seen that there's sleep pods for you to take a short break. Some places, there's little well-being areas for you to take yourself off to, games of ping-pong, on-site pool tables. I've even heard of one that actually has a getting-ready room. For any socials that might be happening, an ability for you to bridge the gap between the day finishing at work and the night starting, which is inventive.

Iona Bain: Yeah, it's like a glow-up room.

Jodie Greenway: Absolutely.

Iona Bain: It beats having to do your makeup in the toilet mirrors. I think what's really interesting is that sometimes people might see those attractive benefits like ping-pong tables and free beer and getting-ready rooms and things. But in your view, do we sometimes value those at the expense of the slightly less exciting, glamorous benefits that could actually be more important for us in the long term?

Jodie Greenway: I think sometimes people will look at things in the here and now. What does it mean for me now? That's all well and good. But will that be something that you want to take advantage of a year, 2 years, 5 years down the line? What is your plan and career pathway? Sometimes people might go into a job thinking, "Okay, I'm going to stay in this job for a short period of time. It's what I want now." But then maybe there's a need for them to consider reassessing because a lot of people will start a job thinking that this isn't going to be a career, but actually ends up becoming a career because they make friends, they enjoy the company, they have a loyalty to the company, and they continue on within that same employment.

Iona Bain: That's interesting. Maybe even if we don't think we're going to be with the employer for that long, we still ought to be thinking about long term just in case our plans change. Jodie, in your opinion, what's the most effective and potentially overlooked benefit?

Jodie Greenway: I think definitely the private medical insurance, if it's available. That's something that at the time of need can be actually really impactful. It's not something that you tend to think about until you need it. It's probably worth mentioning alongside this that actually some of the protection benefits that are available as well. Some companies might offer potentially a death in service benefit, additional life coverage for different events, critical illness cover. There's a real myriad of protection that could be available, and if not completely free of charge can be discounted.

Iona Bain: That's a really good point because income protection, critical illness cover, these are insurance policies that people do tend to forget about. But when something goes wrong in life, they really come into their own. It's definitely something to look out for if it's on offer. Finally, we'd love to give people a quick and easy win. Something that they can think about as they go away, make a cup of tea, wait for the kettle to boil. What would you suggest that would make a significant difference to their finances in the longer term?

Jodie Greenway: We touched upon it earlier around people seeing the value of the salary package more than anything else. When people start employment, they are now auto-enrolled into the pension scheme. A lot of people say, "Actually, that amount coming out of my salary, can I afford it?" Might opt out. Where they're opting out, it's just to stop and think for the cost of what could be a really valuable pension in the long run for the very short-term gain, there's a massive long-term impact that could see you in retirement not being as comfortable or doing things that you want to do with the time that you've really worked all of your life so hard to enjoy.

Iona Bain: Because ultimately, your workplace pension is the most valuable employee benefit that you can get, so make the most of it.

Jodie Greenway: 100% 

Iona Bain: Brilliant. Thank you so much, Jodie. 

Jodie Greenway: You are welcome. 

Iona Bain: That's all we've got time for today, but we really hope this episode has helped you understand more about the perks that your employer could be offering and how you can ensure you're making the most of them. This podcast is brought to you by L&G. If you want to help others get a little bit richer, too, then you can, of course, share this episode. We would absolutely love it if you did so. Don't forget, you can keep up with the show on YouTube, TikTok, and Instagram @legalandgeneral. Finally, if there's a topic or a question that you've got for us, please get in touch on our socials because we'd absolutely love to hear from you. Until next time, see you soon, and thanks for listening.