New UK Labour party’s impact on employee benefits
The new UK Labour party’s impact on employee benefits, including healthcare, pensions, and employment rights, will likely be significant. However, these changes will take time to implement. Employers should stay informed, budget for potential cost increases, and work with professional advisors to adapt to the evolving regulatory environment. By maintaining a proactive approach, businesses can navigate these changes smoothly and continue to support their employees effectively.
Employers should also consider reviewing and potentially increasing contributions to Defined Contribution (DC) pensions now, taking advantage of the current opportunity to prepare employees adequately for retirement amidst upcoming reforms. Engaging with brokers and consultants to navigate PMI and pension adjustments will be crucial in managing these transitions effectively.
Healthcare
The government has committed to boosting NHS services, focusing on dental care, GP availability, and mental health support, including the addition of 8,500 mental health staff. Labour’s strategy emphasises shifting resources from hospitals to primary care and community services, enhancing GP training, and ensuring greater numbers of face-to-face appointments.
- Impact on individuals – Insights from Howden Life and Health reveal that in the last twelve months, there has been a 46% increase in individuals – without access to employer-funded healthcare – choosing to invest in private medical insurance to help accelerate their access to diagnosis and medical treatment.
- Impact on employers – For businesses, the ongoing challenges within the NHS will mean the continued reliance and increased employee demand for Private Medical Insurance (PMI) to bridge gaps in healthcare and to help to reduce long-term absence in the workplace. PMI is designed to complement the NHS rather than replace it and growing numbers of employers are now looking to add this to their overall benefits package as a valued employee benefit.
Pensions
The new government has committed to maintaining the triple lock on state pensions, ensuring they rise with inflation, average earnings, or by a minimum of 2.5%. While this will be a welcome relief for retirees, this policy has minimal immediate impact on business operations.
- Impact on employers – Cheryl Brennan, Managing Director of Howden Employee Benefits & Wellbeing, commented, “Alongside private healthcare, we know that pensions are a highly valued employee benefit. Some of our clients who want to stand out as employers of choice and are committed to a meaningful employee financial well-being strategy are already offering pension contributions above the minimum levels required as part of their overall talent recruitment, retention, and well-being strategy.”
Changes to Employment Rights
Labour’s green paper proposes significant changes to employer rights that will impact businesses and change employment rights from day one, including sick pay and maternity benefits. These changes will enhance employee security but may increase costs for businesses, particularly with the broadening definition of an employee and greater support for union rights.
Read Howden UK’s full article.
This information about the New UK Labour party’s impact on employee benefits is provided by Howden Employee Benefits and Wellbeing. If you need support with your benefits in the UK, please contact Asinta, and we will connect you with the local experts at Howden.