Flexible benefits

Flexible benefits make it possible for employees to vary their pay and benefits to suit their personal requirements. Either they can change the mix of benefits they receive, without affecting their pay, or adjust their pay by taking fewer or more benefits. You may wish to fund all or part of the benefits. 

There is no standard approach to flexible benefits. Scheme design typically uses the following components:

  1. Flex pot / Benefit allowance / Flex account

    A percentage of salary which the employee must spend on a range of benefits or if permitted, take as cash.

  2. Benefit ‘trading’

    More of one benefit can be chosen by taking less of others, such as the sale of holiday entitlement funds greater income protection cover.

  3. Salary sacrifice

    Depending on the policy, the employee may be able to give up part of their salary, this is referred to as 'salary sacrifice'. In exchange you'll provide a non-cash-benefit. For example, you could provide childcare vouchers, company car or protection benefits.

    You can use your National Insurance (NI) savings to offset administration costs or return them to employees.

  4. Salary deduction

    Employee pays for the benefit with a deduction from either their net or gross salary (dependant on the tax status of the benefit).

Flexible benefits use our standard Group Life Assurance and Dependants’ Pensions, Group Income Protection and Group Critical Illness Cover product material. See the relevant technical guide for more information:

PDF file: Group life assurance and dependants' pension technical guide PDF size: 695KB  

PDF file: Group income protection technical guide PDF size: 835KB  

PDF file: Critical illness cover technical guide PDF size: 1.2MB  

Please refer to the relevant technical guide for details about the cover that we can provide and how we assess claims.