Having worked with many large employers over the years, Phoenix is without a doubt the best in terms of the benefits package on offer. The core benefits are excellent as we exploredhereandhere. The investment options are too as we coveredhereandhere.
There is much more though, that is worth exploring within the benefits package. It is important though to understand the tax cost of selecting these benefits as well as the direct benefit to you.
Tax saving benefits
Firstly let’s look at the income tax reducers not covered above; Additional Holiday, Cycle to Work, Electric Vehicles, Coaching and Advice. All of these benefits reduce your income tax and national insurance bills (the EV scheme does have a small benefit in kind charge added to income tax). These tax savings can be particularly attractive if you are paying income tax rates at 40%, 60% or 45% which are the tax rates at £50,271-£100,000, £100,000-£125,140 and £125,140+ (England, Wales or Northern Ireland) or 42%, 63% or 47% which are the tax rates at £43,663-£100,000, £100,000-£125,140 and £125,140+ (Scotland). If you earn over £100,000 and would otherwise qualify for free child care your effective tax rate could be as high as 27,000% as £1 over this income tax loses you all of your funding.
In this context using any of these benefits as an income reducer is worthwhile provided that you will get at least some enjoyment from the flexible benefit selected (although if you earn £100,001 and qualify for free childcare it would be worth getting a ‘cycle to work’ bike and keeping it in the cupboard). For everyone else it is like a 20% discount on the normal price.
Buying additional holiday is a great option is you are close to one of these nasty tax thresholds and simply want to reduce your income (and stress levels), just remember not to logon to e-mails whilst away.
The cycle to work scheme has some restrictions but is a relatively generous amount of up to £3,600 which can include accessories as well as a the bike itself. It also caters for both the road bike and mountain biking communities (who are two very different tribes).
The EV scheme and financial coaching are both offered by our good friends (and fellow BCorps) Octopus. The EV scheme is a very tax efficient way to replace your car and the financial coaching option is good for those that don’t need broader advice.
The Advice option is of course offered by ourselves and includes a cashflow projections(examples here), a risk assessment and advice concerning your staff benefits.
Other benefits
You can build yourself an excellent package of benefits for you and the family from other non-income tax relieved benefits and should do so (being careful not to increase your income where you are close to a threshold).
It is really important to protect your loved ones but it is often complex and costly. MyChoice includes a range of benefits that make it easy to achieve this, all in one place.
We always encourage everyone to ensure that they have wills, powers of attorney, healthcare cover, travel insurance, critical illness cover, dental insurance, health assessments, spouse/partner life cover where needed, before doing anything else. These are all ‘peace of mind’ benefits that you can sort out once and then forget about until something major changes.
All are available via MyChoice.
