Employers are missing out on lower employee benefits premiums
Employers are over-paying on employee benefits premiums, according to tax experts.
Employers could be in line for a cut in the premiums on their most common staff insurance schemes, making savings of many thousands of pounds every year, but they are failing to negotiate the arrangements.
According to Matt Haswell, associate director in Smith & Williamson’s employee benefits team: "There are some great bargains to be struck at the moment, but it’s doubtful that today’s attractive rates can be sustained."
He added: "We are finding that insurers are currently offering competitive terms on, for example, income protection policies, healthcare, critical illness and other group risk insurance schemes, but employers are frequently unaware of the potential savings. We have seen employers reduce premiums by around 30% a year – without cutting staff benefits – but firms are simply unaware of what’s out there.
"Businesses with relatively high employment costs such as professional service firms and those from the financial service sectors are particularly well placed to benefit. It’s up to employers to make the most of the situation and to do so while they can. We don’t know how long insurers’ terms will remain competitive so it’s a case of buy now while stocks last.
"The key point to remember is that it should not be necessary to cut staff benefits to achieve savings in premiums, so this is a win-win situation for employers and employees."
According to Smith & Williamson, the move towards flexible benefits platforms has increased competition among the group insurance market. Ever increasingly group risk schemes are being administered on such platforms and insurers recognise the efficiencies that this can allow. As such, insurers are offering very competitive premium rates in order to win market share. "It’s up to employers to make the most of the current situation," added Haswell.