Private medical insurance has become the most desired employee benefit among UK workers, as cost pressures and access to healthcare push employees to seek more practical financial and wellbeing support from employers.
New research from Zest found that 32% of employees prioritise private medical insurance, ahead of increased pension contributions at 28%. Salary sacrifice, a wellbeing allowance, and employer contributions towards home energy costs each followed at 17%.
The research also found strong demand for wider investment in reward. Two-thirds of UK workers want their company to increase spending on employee benefits, while 48% think their current benefits package is inadequate. Just 47% said they get value for money from benefits.
The findings expose a gap between demand and engagement. Only 59% of employees know exactly what benefits their employer offers, and 38% use the full range of workplace perks available to them. That suggests many employers may be carrying benefit cost without gaining the full retention, engagement, or wellbeing value.
Joy Waugh, employee benefits consultant at Zest, said: “As living costs rise, demand for financial support has spiked.”
She added that employers need to improve communication to understand workforce needs and deliver personalised support that improves value for both employees and employers.
The rise of private medical insurance as a priority reflects several overlapping pressures. NHS waiting times have increased demand for faster access to diagnosis and treatment, while inflation, food prices, and energy bills have kept household budgets under strain. Benefits that once looked like optional perks are increasingly judged by whether they reduce financial uncertainty or help employees manage essential costs.
The preference for increased pension contributions in second place shows that long-term financial security remains important, even while short-term living costs dominate. In the wider workforce, freelancers face a hidden workplace benefits shortfall, including the loss of employer pension contributions, paid leave, and sick pay. The Zest findings show that employees inside organisations are also reassessing the real value of total reward.
Salary sacrifice remains relevant because it can help employees access tax-efficient pension contributions, bikes, electric vehicles, or other benefits depending on scheme design. Employee understanding of salary sacrifice and benefits-in-kind taxation is often limited, however, making communication central to uptake.
The energy-cost finding is notable. Employer contributions towards home energy bills became more prominent during the shift to remote and hybrid work, but demand remains tied to household pressure. Where employees work from home for part of the week, the boundary between workplace costs and personal costs is less clear than it was before the pandemic.
HR and finance teams still need to control the economics of reward. Benefits spend can grow quickly, particularly where private medical insurance premiums rise with claims, utilisation, and medical inflation. Employers need to balance employee demand with affordability, eligibility design, and long-term sustainability.
Personalisation is becoming more important as a result. A single benefits package may not work for a workforce divided by age, income, caring responsibilities, location, health needs, and working pattern. Younger employees may prioritise healthcare access, financial wellbeing, and flexibility. Older employees may place more weight on pension contributions, health cover, and protection. Lower-paid workers may value salary sacrifice less if it reduces take-home pay or interacts poorly with minimum wage rules.
The low engagement figures point to an avoidable weakness. If employees do not understand what is available, benefits fail twice: employees do not receive support, and employers do not receive the recruitment, retention, and morale return they expected. Benefits platforms, manager briefings, onboarding, annual statements, and targeted campaigns can all improve awareness, but communications must be repeated and practical.
Healthcare access, financial stress, and weak retirement confidence can affect absence, focus, and retention. Benefits cannot replace fair pay, good management, or manageable workloads, but they can form part of a broader employment offer that helps workers absorb pressure.
The research suggests that employees are becoming more specific about what support they value. Gym discounts, one-off perks, and generic wellbeing offers may still have a place, but demand is concentrating around benefits that solve practical problems: healthcare access, pension adequacy, tax-efficient support, wellbeing budgets, and household costs.
The task is not simply to spend more. Reward strategies need clearer evidence of need, stronger communication, and better measurement of whether benefits are actually used. Employee benefits are under pressure to become more targeted, more transparent, and more closely linked to the realities workers face outside work.
You must be logged in to post a comment.