What company perks are available at work?

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Employee perks and their value
Employee perks and their value



You might think that the only thing your employer is ever going to give you is a major headache and possibly a stomach ulcer. However, many businesses are far more generous than we realise, because they offer a range of perks from pensions to company cars that could make or save you some serious cash. We list ten of the best things on offer from many employers, and what they could be worth to you.

1. Pension
Most people are aware of their workplace pension, and now that so many people are automatically enrolled in their company scheme, more than half of employees are members.

If you are part of a very small business, or you earn less than £10,000, you may just be given the chance to save into a pension, which isn't any better than saving into your own personal pension. However, the vast majority of firms will make a contribution as soon as you do.

The government minimum at the moment is just 1% for most employers, although this is set to grow to 3%. The good news is that already the average employer pension contribution is 6.1% of salary. So just by joining a scheme and putting away some money for your future, your employer will essentially give you a pay rise of 6.1%. For the average earner that's more than £1,500 of free money every year.
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2. Life insurance
Even if your employer offers almost nothing in the way of perks, then there's a good chance they offer some sort of life insurance, which will pay out if you were to die while working for them. Typically this tends to be either two or four times salary, and while it's not a benefit you ever want to take advantage of, it's worth your loved ones knowing they can expect this support if the worst came to the worst.

3. Share scheme
Some 15% of all employers offer access to some sort of share scheme. A decade ago this tended to be share options, where you were told that on a specific day in the future you would be able to buy company shares at a specific price, and if the shares rose in the interim you could buy and sell on the same day and make an instant profit.

Nowadays it's far more likely to be a share incentive plan, which allows you to buy shares without paying tax on the portion of salary you use to buy them with (as long as you hang onto them for five years). Some companies offer some form of matching - where you get a number of free shares when you invest.

The disadvantage of these schemes is that all your eggs are in one basket, and you are investing in something that's likely to be very volatile. The advantage, however is that your employer is encouraging you to invest a little for the medium term - with the potential of seeing that money grow into a nice windfall.

4. PMI
Just over one in four employers offers private medical insurance to at least some staff. This is a pricey benefit, so tends largely to be offered to more senior staff or offered as an option that you can choose to buy into. Traditionally this was by far the best way to get cover, because with a workplace insurance you would be covered for conditions you were already suffering from when you signed up - so you could theoretically phone from hospital and join the scheme.

Nowadays when you buy into the scheme, you'll need to check whether pre-existing conditions are covered. Even if they are not, it may still be the cheapest way to buy this insurance - because you can take advantage of the group discount, so is worth factoring in when you're shopping around for cover.

5. Childcare vouchers
At the moment, these can be used to shave almost a thousand pounds off your childcare costs - as long as you use a regulated childcare provider. A small number of employers offer them on top of your salary, but most will do it as salary sacrifice, where you give up a portion of your salary and get vouchers instead.

The advantage of doing this is that the vouchers are exempt from tax and national insurance, so if you gave up £1,000 of salary it would usually only be worth £700 to you once it had been taxed. If you take it as vouchers it's worth the full £1,000. Basic rate taxpayers can buy up to £243 of vouchers a month - which gives an annual saving of £930. If both parents are entitled to the vouchers, they can get double the saving.

From next autumn, the system is going to change, but as long as you sign up for vouchers before then, you can continue to take advantage of the current scheme.

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Money Saving Tips for Your Employee Benefits
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6. Company cars
The increased tax paid on company cars means that this is a far less popular perk than it once was. In the year 2000 there were more than 1.6 million company cars on the road. Now that number has dropped to 940,000.

Often the cars are now offered as an option - where you can take the car or choose an allowance, so you'll need to do the maths to work out what's best for you. If you opt for a small car with low CO2 emissions (on which the tax is based) and your employer covers things like maintenance, tax and insurance, the it may well work our as cheaper than running a car of your own.

7. Free eye test
Every employee who works with a computer is entitled to a free basic eye test and the cheapest glasses at least every two years, but around a third of employers offer more - usually a high tech eye test and higher value vouchers towards more expensive glasses. Others have extended the benefit to those who drive on business too.

8. Annual rail card
Around a quarter of employers will offer you an interest-free loan in order to enable you to buy a season ticket to get to work for less. It's a great way to spread the cost of a season ticket, which can run to thousands of pounds, so check if your employer offers it.

9. Discount on a bike
The government is trying to promote people cycling to work, so offers tax benefits on buying a bike. Your employer can buy you a bike worth up to £1,000, tax free. You then repay the cash out of your gross salary over 12-18 months through salary sacrifice.

10. Retail discounts
Even when your employer doesn't have the money to offer you a raft of traditional benefits, they are increasingly likely to offer what is known as voluntary benefits. This is essentially a catalogue of discounts that you can take advantage of.

They range from discounted shopping vouchers and dining cards to cheaper travel insurance or healthcare. These won't always be cheaper than you can find elsewhere by shopping around, but are well worth checking when you are considering a major purchase or about to hunt around for insurance, just in case they have a great deal to suit you.

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