You shouldn’t un­der­es­ti­mate the value of em­ployee perks

The Peterborough Evening Telegraph - - Your -

PERKS from em­ploy­ers can be very valu­able ben­e­fits and are well worth hav­ing. Cer­tainly they should not be re­jected, es­pe­cially if there is noth­ing to pay for them. How­ever, there is a dan­ger if you rely on them too much.

An ex­am­ple of this is Death in Ser­vice Ben­e­fit. Where this ap­plies, it can vary from be­tween two to four times an­nual salary. It usu­ally only ap­plies to ba­sic salary so of­ten ex­cludes bonuses, over­time and ben­e­fits but nev­er­the­less a valu­able ben­e­fit. It is not usu­ally med­i­cally un­der­writ­ten, so if you have any health is­sues which would make per­sonal life as­sur­ance costly, this is even more valu­able.

The risk of re­ly­ing on this as core fam­ily pro­tec­tion is that it is only paid for death in ser­vice. The ben­e­fit ceases if you leave em­ploy­ment for what­ever rea­son, be it res­ig­na­tion, re­dun­dancy, dis­missal etc. Any new em­ploy­ment may not pro­vide the same level of ben­e­fit or any ben­e­fit at all. If there have been any med­i­cal prob­lems you may not be able to get per­sonal life as­sur­ance, or it may be costly to ob­tain it.

Even if the ben­e­fit does ap­ply in the new em­ploy­ment, four times salary is only four years in­come. If you are leav­ing a spouse and chil­dren this is un­likely to be enough. The ben­e­fit is valu­able but should be re­garded as a sup­ple­ment to and not a sub­sti­tute for fam­ily pro­tec­tion.

The same sit­u­a­tion ap­plies to Per­ma­nent Health In­sur­ance (this re­places your salary if you have a longterm ill­ness), a valu­able ben­e­fit but again lost when em­ploy­ment ceases.

Med­i­cal In­sur­ance is slightly dif­fer­ent as many providers al­low you to trans­fer to a per­sonal pol­icy if em­ploy­ment ceases, so this at least can be con­tin­ued af­ter leav­ing.

Em­ployer pen­sion schemes vary con­sid­er­ably, but the ba­sic rule is that the pen­sion is pre­served and is not lost on leav­ing em­ploy­ment although the em­ployer will no longer be pay­ing into it. The pen­sion can be left where it is, but en­sure that any changes of ad­dress are ad­vised to the pen­sion ad­min­is­tra­tor, or it can be trans­ferred to a pri­vate pen­sion. Whether this is the best course of ac­tion is an­other mat­ter, but the op­tion is there. This cer­tainly re­quires spe­cial­ist ad­vice.

High tax­a­tion has eroded the value of car and fuel ben­e­fit, so los­ing the com­pany car may not be so fi­nan­cially trau­matic. In fact, in many cir­cum­stances, it may be bet­ter to forego these ben­e­fits and just claim ex­penses for us­ing your own car for busi­ness pur­poses.

In the past, it was not un­usual for a per­son to be with the same em­ployer for the whole of their work­ing lives. This is no longer the case, and it is typ­i­cal to have sev­eral em­ploy­ments. The ben­e­fits are im­por­tant and there­fore you should try to pre­serve these as you change jobs, but is not al­ways pos­si­ble. At the very least put ba­sic fam­ily pro­tec­tion in place and use the perks to sup­ple­ment them.

With Alan Ken­drick, In­de­pen­dent Fi­nan­cial Ad­viser Oak­wood In­sur­ance Con­sul­tants and Fi­nan­cial Ser­vices Tel: 01778 341658

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