Grocery Salary Sacrifice: The new cost of living benefit that’s stretching employee salaries
The cost of living has soared in recent years. In March 2023, food and non-alcoholic drink prices were 19.1% higher than the previous year, putting pressure on ordinary people to make ends meet.
The challenge for HR managers is supporting their employees at a time when substantial pay rises may be off the table.
The new HMRC grocery salary sacrifice scheme may be the answer. It’s free for employers and could save your employees as much as 8% on their supermarket shopping. That’s an average saving of £384 a year!
Let’s take a look at why this benefit is so effective right now.
Covered in this blog:
- Why the scheme is in demand
- Why you probably haven’t heard about it yet
Supermarket savings can make a big difference right now
A quarter of UK employees (27%) say they’ve experienced brain fog and made mistakes at work because of financial stress. But worse still — more than half (53%) say the cost of living crisis and rising mortgage rates have been negatively affecting their ability to work as normal.
As this crisis morphs into a longer-term state of affairs, it’s imperative businesses step in to help their employees. The business case is simple: if your employees can’t afford to put food on the table, their productivity could drop and they may start looking for alternative places to work.
But even simpler than that: supporting our colleagues is the right thing to do.
Unfortunately, economic pressures have made inflation-matching pay rises difficult for many employers to offer. We think that’s why we’re seeing such interest in grocery salary sacrifice schemes right now. They let you make a meaningful difference at no cost.
So why haven’t you heard of it yet?
HMRC introduced rules allowing grocery salary sacrifice back in 2007, but we’re only just seeing schemes appear on the market. How come?
We think there are a few reasons. Firstly, it’s new. Benefits schemes like this can take a while to gain traction. As more businesses sign up and word spreads, the transition from obscure to ubiquitous can happen very quickly.
Secondly, there hasn’t been as much demand. When times are good, people don’t worry so much about paying for their shopping. But the cost of living crisis has left millions of people suddenly struggling to make ends meet.
Finally, it can sound complicated and daunting. But it really doesn’t have to be. Providers like Mintago can get you set up in no time, and your employees can opt in from an app on their phones.
Given there’s zero cost to the business, we think grocery salary sacrifice is a no brainer — especially if you employ a large number of basic rate taxpayers.
Want to know more?
Book a call with a member of the team and we’ll walk you through how grocery salary sacrifice could work for your team. We can even help you calculate how much your employees will save on their shopping!
Or read our other blog to discover how grocery salary sacrifice works and how your employees could save money.