Employees left uninsured as protection gap widens

New data has revealed that UK employees are woefully under-insured, with employers contributing to a widening protection gap. According to research from employment consultancy, Barnett Waddingham, more than two-thirds of employees are not receiving benefits such as Critical Illness, Income Protection or Dental Insurance as a paid for benefit.

The study found that Critical Illness Insurance is among the least received benefits by employees working in the UK, with a staggering 72% not being given the option of this benefit. Income Protection – which pays you a regular income if you can’t work because of sickness or disability – is also significantly under implemented, with just 25% of employees surveyed receiving it.

Shockingly, this issue is particularly acute for employees with disabilities, with 62% not being offered Income Protection. Of those who weren’t offered Income Protection as a paid benefit, almost two-thirds (61%) said they would want to use it.

Dental Insurance was also found to be a notably under implemented benefit with 72% of employees not receiving this, at a time when costs for private dental care are spiralling and many are unable to access NHS dentist services.

Even popular health benefits, such as Private Medical Insurance and Life cover were found to not be available for many respondents with 68% not being given these options. This is despite 40% of employees stating that they would pay for these benefits if provided. The disparity is even greater amongst certain demographics, with 58% of men and 71% of women not being offered Private Medical Insurance.

According to the CIPD’s 2022 Reward Management Survey, death in service or life assurance was found to be provided by 61% of employers, with Private Medical Insurance offered by 50% – however, this notably varied depending on employee seniority, and the size of organisation.

The findings of Barnett Waddingham’s report are a stark reminder that UK employers must do more to protect the long-term health of their employees. By failing to offer benefits such as Critical Illness Insurance, Income Protection and Dental Insurance they are contributing to a widening insurance gap, leaving their employees vulnerable and unprotected.

As one in seven (14%) employees leave their jobs to seek better benefits, employers are also potentially risking their ability to attract and retain talent if they do not address these issues.

Julia Turney, Partner and Head of Platform & Benefits, Barnett Waddingham, said: “Employers have a crucial role to play in supporting the well-being and financial security of their employees. In the aftermath of the COVID-19 pandemic and ongoing economic uncertainty, it is more important than ever for employers to prioritise the health of their workforce. Providing these benefits can help employers attract and retain top talent, as employees now increasingly seek out employers that prioritise their well-being. Taking the necessary steps to ensure employees are protected and supported will also help to instil resilience into a business’ workforce, reducing potential future risks and ensuring longevity in an organisations future business plans.”