Price is not the only criteria

Let’s face it, whenever we look to buy something the most important thing is price. I don’t know about you, but if I am walking through a smart shopping mall and I see an item in the window that looks fantastic but with no price on it, I don’t go in. ‘If you need to know the price, you can’t afford it”. Well, I suppose it keeps the riffraff out.

Why does price matter?

In these very price sensitive times, it is of course wise to know that the price of what you are purchasing is

  • One you can afford, and
  • Appropriate for the product you are purchasing.
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And the same goes for employee benefits, such as the staff pension scheme, the medical insurance, life cover or numerous other benefits you can buy to augment the salary of your staff. However, price is not (or should not be) the only criteria.

Take life cover, for example. If you buy a group life assurance scheme, all you need to know is that it will pay out if one of your employees dies, right? What else is there to know?

Notwithstanding items such as the insurers treatment for overseas travel or tax issues, you could be forgiven for thinking that’s broadly it.  However, increasingly insurers are introducing free ‘add-ons’ to help differentiate them from their competitors. All group life assurance firms offer bereavement counselling for staff and their close family as standard and many also offer additional probate services. But did you know that there is a raft of other services that staff can access under this policy and many of these are provided free of charge by the insurance provider.

Extra Add-ons

Extra ‘add-ons’ can include:

  • 24/7 online and telephone GP services
  • counselling services and mental health toolkits
  • financial and legal guidance
  • health & diet guidance and fitness programmes
  • physiotherapy and second medical opinions
  • gym and retail discounts

Life cover

Life cover is a low cost benefit to employers that is highly valued by employees, however being able to consider the other benefits such a policy can provide, if properly communicated, can significantly add to the overall salary package.

Workplace Pensions

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Another area where I often see price dominating proceedings, and where perhaps it shouldn’t, is in workplace pensions. There is already a price cap in place, meaning there is a maximum cost pension providers can levy on member’s funds. Even with the cap currently sitting at 0.75% per annum (known as the annual management charge, or AMC), charges are more typically 0.6% downwards and probably 0.5% is more the norm. I would agree that where a scheme is being charged at 0.75% when 0.4% is readily available, this should not be ignored, but chasing 0.1% differentials is questionable. Often, of far more importance are areas such as:

  • Quality of administration – for member, employer and third party services
  • Compliance services
  • Volatility and performance of the default pension fund and its de-risking process
  • Alternative default funds (in case the chosen one becomes unsuitable)
  • Member communications
  • Quality of online access
  • Member choices
    • The ability to construct their own portfolios
    • Retirement options
    • Access to information to make informed decisions relating to:
      • investment funds
      • retirement

How can you ensure your scheme remains competitive?

A regular review of your workplace pension scheme can help ensure your scheme remains competitive and optimal for your workforce.

If you would like to discuss these benefits or any other employee benefit further, we would be very happy to help.


The information provided is for general information only and is not intended to address the particular requirements of an individual or business.  It does not constitute any form of advice or recommendation by MWM Employee Benefits or Menzies Wealth Management Ltd and should not be relied upon by individuals in either making or refraining from making any financial decisions. Where necessary, you should seek appropriate professional advice before acting on any of the information provided.

MWM Employee Benefits is an authorised representative of Menzies Wealth Management who is regulated and authorised by the Financial Conduct Authority (FRN 486548).

Menzies Wealth Management Limited is registered in England and Wales under number 06597008. Our registered office is at 1st Floor, Midas House, Goldsworth Road, Woking, Surrey GU21 6LQ. 

Posted in Blog