As the UK gears up for significant economic shifts in 2025, employee benefits are set to come under intense scrutiny. The increase in National Insurance (NI) employer tax and the rise in the minimum wage, both coming into effect from April 2025, will undoubtedly impact businesses across the country.
With these additional financial pressures, employers will be expected to rethink their benefits packages to ensure they continue to deliver value to both employees and the organisation. Failure to do so may result in reductions to the employee benefits that have traditionally been seen as key to workplace wellbeing.
Growing Scrutiny of Employee Benefits
According to the Group Risk Development (GRiD), the industry body for the group risk sector, 2025 will see increased pressure on employers to justify the value of the employee benefits they provide. In the wake of the NI tax hike and rising minimum wages, many businesses will be re-evaluating all areas of expenditure, including their benefits packages, to ensure they are both cost-effective and beneficial to their workforce.
Katharine Moxham, spokesperson for GRiD, said there should be greater comprehension and transparency of benefits.
“We would urge all employers to ensure they fully understand the benefits that they currently offer, to monitor their use, and ensure employees are aware of the breadth and depth of support available,” she said.
“Where benefits are shown to be effective they will be retained. However, many companies will be looking to make savings to account for the increased costs of employing staff. As a result, benefits will be at risk if there is not sufficient evidence to support their continuation.”
This means employers will be looking for more than just the traditional perks like private healthcare or gym memberships. Benefits that are directly tied to employee engagement, business outcomes and wellbeing—particularly those that support mental health, financial wellbeing and physical health—are expected to become increasingly essential.
The Evolving Needs of the Modern Workforce
The demands placed on employees have shifted dramatically over the past few years. In addition to the traditional needs of health and financial support, there’s growing recognition of the wider and more diverse challenges faced by today’s workforce.
One significant trend is the rise of the “sandwich generation”—employees who are balancing the needs of their children with those of ageing parents. According to the Office for National Statistics (ONS), over 2.5 million working carers in the UK are juggling these responsibilities, and businesses are recognising the importance of offering support to this demographic.
As more employees find themselves managing the pressures of caregiving, employers will need to tailor their benefits packages to ensure they meet the complex needs of these individuals.
At the same time, access to primary healthcare remains a growing issue, with many employees facing delays in securing GP appointments or accessing dental care. This challenge highlights the importance of offering workplace wellbeing support that can bridge the gap in healthcare provision and assist employees who may otherwise be absent from work due to illness or medical appointments.
Mental Health and Wellbeing: The Top Priority for Employers
Among the most pressing concerns for employees in 2025 will be mental health, which has topped the list of benefits demand according to research by Towergate Employee Benefits. With rising levels of stress, anxiety, and depression in the workplace, businesses will need to prioritise mental health support as part of their overall employee benefits strategy.
In addition to traditional mental health services such as Employee Assistance Programmes (EAPs), employees are increasingly seeking access to wellness initiatives that promote stress reduction, resilience and emotional support.
Employers should also consider other aspects of wellbeing that employees have identified as important, such as financial health, fitness, fertility and support for neurodiversity. These areas of focus are critical in ensuring that employers address the diverse needs of their workforce, providing holistic support that benefits the entire organisation.
The Business Case for Employee Wellbeing
Employee benefits are not just about supporting staff; they also have a direct impact on business success. Research from Towergate Employee Benefits shows that 41% of employers believe that offering health and wellbeing support leads to increased productivity, while other reported benefits include better staff retention, engagement and loyalty. Nearly one-third of employers also see improved recruitment and reduced absenteeism as key outcomes of offering comprehensive wellbeing support.
Debra Clark, head of wellbeing at Towergate Employee Benefits, said providing a greater range of benefits to staff would help productivity in the long term.
“Offering the right support to employees doesn’t just benefit them—it benefits the business too,” she said. “When companies provide the right support, they see a return on investment in terms of improved recruitment, increased engagement, lower absence rates and a more productive workforce.”
Employers who fail to offer the right benefits risk losing out in a competitive job market. With employees now looking for more than just financial compensation, businesses need to ensure that their benefits offerings are up to the task of supporting staff in every aspect of their lives.
The Importance of a Tailored Approach to Benefits
With such a wide range of employee needs and expectations, a one-size-fits-all approach to benefits will no longer suffice. To stay competitive, employers must take the time to understand the specific needs of their workforce and implement a tailored strategy that delivers meaningful benefits for all employees—at all levels.
This will require a data-driven approach, with HR teams tracking the uptake and effectiveness of different benefits to build a business case for those that deliver the greatest value. Benefits that offer clear, measurable results for both employee wellbeing and organisational performance are those most likely to be retained and expanded in the coming year.
Employers are also advised to stay abreast of emerging trends and new benefit options. Programmes such as gender-specific support and low-cost, whole-of-workforce benefits are becoming more readily available and can offer significant advantages for businesses looking to stay ahead of the curve.
