LONDON, June 10, 2025 – As U.K. employers grapple with heightened economic uncertainty and greater financial pressures on budgets, steering the right course on benefit strategy is more challenging than ever. This is according to a survey by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. As a result, companies are turning to smarter spending, sharper focus and using benefits as a strategic tool to drive engagement, retention and purpose.
The 2025 Benefits Trends Survey found rising benefit costs to be the top issue (64%) influencing U.K. employers’ benefit strategies in 2025, up from 57% in 2023. Other top concerns include competition for talent (59%), expectations for an enhanced employee experience (44%) and cost of living (37%)
“After a long period of high benefits inflation, and in the face of a possibly weakening economy, employers are taking a step back and looking to focus on what drives real value for employees and the business.”
Andy Leighton | Director, Health & Benefits
“After a long period of high benefits inflation and in the face of a possibly weakening economy, employers are taking a step back and looking to focus on what drives real value for employees and the business. That means targeting support and spending on the benefits that matter most, enabling personalisation and helping employees make better decisions,” said Andy Leighton, Director, Health & Benefits.
As the cost of medical care continues to show double digit growth in the U.K, employers face greater challenges in delivering their strategy in key areas such as health benefits (40%), wellbeing programmes (28%), and retirement benefits (23%).
To address these concerns, employers are shifting their strategy. Few are expanding their benefit portfolio, choosing to instead focus on extracting value from their current offerings and improve financing, employee experience, analytics and administration.
In the next three years, 57% of employers plan to reallocate or rebalance spend. Additionally, 70% are looking to expand benefit choice. A majority (60%)plan to tackle high costs by adopting navigation solutions to support employees using benefits, realign spend across benefits (57%) enhancing value or switch to better-value vendors across health, retirement and risk benefits (52%).
Eager to address employee pressure points, companies are also looking to improve the following priority areas over the next three years: maximising value, mental health, health benefits, financial wellbeing and family support. Many plan to increase their use of communication and use nudges and navigation solutions to influence behaviors and enhance the employee experience. Regularly reviewing vendor performance, including employee feedback, is also a key action employers are taking.
“Organisations are facing more pressure than ever to deliver the right benefits strategy. Finding innovative solutions for old and new challenges and reshaping benefits to signal purpose and values is a good start. There is still a long way to go to address these pressure points, but employers seem to be going in the right direction to focus on what matters most to their employees,” said Andy Leighton Director Health and Benefits
The 2025 Benefit Trends Survey was conducted from early March to mid-April. Respondents include 327 U.K. employers, representing a broad range of industries in both the private and public sector.
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