One in three UK employees expects a cut in their pay package this year, while one in ten expects their company pensions benefits to suffer too.

These findings are revealed in a study published today by Hymans Robertson, the independent pensions and employee benefits consultants.

The study, entitled Trends in Employee Benefits 2008, shows a clear disconnect between employee expectations and company outlook.

While employees are pessimistic about the year ahead, human resource professionals are generally upbeat about improving benefits and increasing headcount in 2008.

The disconnect is greater on the high street than in any other sector of the economy. Forty-one percent of retail sector employees say they expect no pay rise at all this year.

Yet human resource managers in the retail sector say otherwise, with 44 percent planning to offer above-inflation increases in retail pay packets.

Londoners are the most bullish on pay, with 66 percent expecting an inflationary rise, while the gloomiest outlook is in the Midlands where 36 percent expect no pay rise at all.

Across the UK, men are more confident than women about their prospects for receiving an above-inflation pay rise this year.

The study found a significant gap in the way Britain’s younger workforce rates benefits in contrast with their more seasoned colleagues.

Young people, aged 16 to 24 years, place greater store on company cars, season ticket loans and dental insurance.

Indeed, 19 percent of younger workers consider a company car to be important compared with only six percent in other age groups.

There is one point, however, on which Britons whole-heartedly agree: 93 percent of those surveyed say their holidays are by far the most cherished benefit of all.

Clive Fortes, partner at Hymans Robertson, said that the disconnect uncovered by the research was almost certainly caused by a general lack of information among the UK workforce.

One quarter of employees interviewed admitted they had no idea whether their benefits had increased or decreased in the last year.

“In our view, companies now have a job to do addressing the low expectations employees have of their reward packages. Human resource professionals must now seize the opportunity to spell out the health and value of their benefits packages without delay,” Fortes concluded.

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