One of the major barriers to employers being able to tempt workers back to the office full-time is concerns over the use of public transport, so salary sacrifice schemes have emerged as an effective tool in avoiding costly commuting and any COVID risk on public transport, and may therefore be the key for many employers opening offices full-time once more.

Most offices closed at the start of the pandemic in March 2020 and many are only just re-opening. In the meantime people have been forced to work from home, but in many cases have become used to new work patterns and practices, and have certainly enjoyed the cost savings. A recent study by online pay-slip provider PayDashboard found that people were saving up to £100 per week by working from home.

Why employees are reluctant to go back to the office

It is clear why many employees are reluctant to return to the office, even if they preferred that work environment to home, and employers are faced with a dilemma and a need for some creative thinking to entice their workforce back.
The health risks of public transport and being in close proximity to people in an enclosed environment, combine with the hassle and time spent waiting for public transport and the cost implications to become strong, prohibitive factors. It has also been reported that 40% of employees would find another job if they were forced to return to the office full-time, because of the financial implications it would have for them.

Salary sacrifice schemes have therefore emerged as a practical and effective solution for employers, particularly when they found that many employees were investing in cheap used cars to overcome the problems posed by public transport. This immediately raised alarm bells for fleet managers because of the many duty of care issues involved in managing grey fleet (vehicles owned privately but used for company business). Effectively employers have less control over grey fleet than their own vehicles in terms of the quality, age and maintenance condition. And for employees, this popularity sent the used car prices sky high, but if you are an employee who doesn’t qualify for a company car, you can understand the temptations of the used car market.

The benefits of a salary sacrifice scheme

In short, a salary sacrifice scheme solves all that, particularly if you take up the option of an electric vehicle (EV). Under a salary sacrifice scheme, a portion of an employee’s salary is deducted from their monthly wage in return for an agreed benefit. A contribution to a new vehicle is a very popular option for a salary sacrifice scheme, particularly now that zero emission EVs can benefit from a reduced tax rate, so employees will pay less
tax and national insurance if they sign up for a salary sacrifice scheme and take an EV, as the deduction is taken before tax and national insurance are deducted. This also benefits the employer. And typically, the employee will enjoy the benefit of maintenance, road tax, insurance and breakdown cover being included in their monthly payment.

Pink Salary Exchange can fully endorse salary sacrifice schemes and we can also report a surge in EVs and plug-in hybrid vehicles being taken through these schemes, as people realise the benefits and see this as a practical and affordable means of commuting. Someone doing short runs into town each day and little else, for example, might see motoring costs of around £20 per month with an EV, compared to several times that if taking buses and/or trains. It is also possible to drive over 30,000 miles in a year for just over £300 in electricity costs, which is already a huge saving on traditional commuting and motoring costs, and with EV technology improving all the time, this can only get better.