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Employee Benefits News

Latest News
16 Feb 2015

The Importance Of Group Income Protection

With studies showing that one in ten UK employees will, at some point in their career, suffer from an accident or injury that makes them unable to work for more than six months, it´s now more essential than ever for companies to introduce a group income protection policy, the FT Adviser website advises.

According to Steve Bridger, head of group risk at Aviva UK Health, not only can this help to improve the morale and productivity of staff, but it will also save employers money as absent employees and poor health in the workplace can be a huge drain on resources.

This means that income protection can ease the monetary risks of long-term absence – which costs UK businesses more than £3.1bn a year – whilst also offering greater peace of mind for employees.

In addition to this, including group income protection as part of a wider wellbeing strategy is a great way to show that you are a caring and considerate place to work, explains John Letizia, head of public affairs at Unum. It can be expensive to replace a member of staff, so offering this kind of benefit reduces the risk of having to do this by significantly improving engagement and retention levels.

The maximum amount of benefit is typically 80% of an employee´s gross salary, up to a maximum of £350,000 a year. Payments tend to start after eight weeks out of work; but for group income protection, this can be deferred for 13, 26 or even 52 weeks.

Vanessa Sallows, benefits and governance director for corporate business at Legal & General, does note that the costs often put business owners off group income protection; however, it can be acquired for approximately 1% of the payroll and the costs qualify as a business expense, making them tax deductible, she explains.

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