- 48% of UK employees want Salary Sacrifice as an option to access EVs
- 33% view it as the most attractive eco-friendly workplace benefit
- But only 32% of businesses are currently offering it to employees.
VWFS Fleet’s survey of 2,000 UK employed adults shows a clear gap between access to Salary Sacrifice car schemes and worker demand for the cost-effective and tax-efficient workplace benefit.
The results reveal that just one third (32%) of UK businesses currently offer a Salary Sacrifice car scheme as a benefit, yet nearly half (48%) of workers would like it as a workplace benefit.
“A Salary Sacrifice car scheme – where an employee ‘sacrifices’ part of their gross (pre-tax) salary for a new vehicle – is a highly valued financial benefit for prospective and existing workers,” explains Dan Wright, Product Manager at VWFS Fleet.
“At minimal cost to the employer, Salary Sacrifice offers employees affordable access to a brand new vehicle, with no upfront payments, early termination fees or hidden costs. It also includes all extra vehicle costs, including insurance, servicing, maintenance and breakdown cover.”
Driving talent attraction and retention, while boosting sustainability
Business sustainability is increasingly placed under the spotlight – with ambitious climate targets approaching and employees demanding change. And there’s a significant talent risk afoot if businesses fail to get this right.
VWFS Fleet’s research highlights that 79% of employees feel it’s important for their employer to be proactive in being a sustainable business. And the younger generations – the next generation of talent – are leading the drive. In fact, Deloitte’s recent research found that 55% of Gen Z and Millennial workers research a brand’s environmental impact and policies before accepting a job, and more than 40% have already or planned to change jobs due to sustainability concerns.
Looking at specific sustainability priorities, VWFS Fleet’s research found that one third (33%) of employees view Salary Sacrifice as the ‘most attractive eco-friendly workplace benefit’, alongside more opportunities to work remotely (48%).
It also found that 75% of employees want to drive down the emissions associated with their commute. And many see Salary Sacrifice as having an important role here – with 67% recognising that it helps to provide affordable access to electric vehicles (EVs) and 65% understand how it helps to reduce personal emissions.
“Salary Sacrifice schemes have a crucial role in incentivising EV uptake through attractive tax incentives,” expands Dan. “The Benefit-in-Kind (BiK) associated with EVs is currently just 2%, fixed until April 2025, then rising by just 1% each year until 2028. This remains significantly below the anticipated BiK rate for petrol/diesel vehicles, which could exceed 30% by 2028.”
A crucial opportunity
Amidst the current talent recruitment and retention struggles, VWFS Fleet’s research highlights a key opportunity for employers and HR managers to bolster the employee benefits package to attract and retain top talent.
“Our research highlights the strong demand from employees for sustainable workplace benefits, with Salary Sacrifice the most in-demand eco-friendly benefit for one third (33%) of employees,” continues Dan.
“Salary Sacrifice provides workers with affordable access to a brand-new electric vehicle, which, for many, is an important transport transition they wish to make, but struggle to afford. However, there is currently a significant lag behind employee demand for Salary Sacrifice and employer provision.
“This presents a crucial opportunity for employers and HR managers to add to their employees’ remuneration package – with minimal cost to the business, but significant effects on talent attraction and retention strategies, as well as wider sustainability goals.”
For more information, visit VWFS Fleet’s Salary Sacrifice guide.