What benefits help employees cope with the rising cost of living?
Rising living costs continue to shape how employees experience work, money and wellbeing. While inflation may no longer dominate the headlines, many people are still managing higher prices for food, housing, energy, childcare and everyday essentials. That pressure can affect focus, financial confidence and overall employee health. For employers, this creates a clear challenge: how do you support people when pay rises alone cannot solve every problem? The answer starts with benefits that feel useful in real life. From cashback and discounts to salary sacrifice and health support, the right benefits can help employees make their money go further every day.
Quick answer:
Benefits that help employees cope with the rising cost of living are the ones they can use regularly and feel immediately. Cashback, employee discounts, salary sacrifice schemes, Employee Assistance Programmes (EAPs) and financial guidance can all help employees stretch their income, reduce everyday pressure and build stronger financial resilience. For employers, the opportunity is to move beyond offering benefits that simply exist and create support employees can easily find, access and use in daily life.
In a hurry? Here are our top three takeaways from our blog on the benefits that help employees cope with the rising cost of living.
1. Cost-of-living pressure is still a workplace issue: Even though inflation has fallen from its peak, employees are still dealing with higher everyday costs. That financial pressure can affect wellbeing, focus, engagement and productivity.
2. Employees value benefits they can actually feel in daily life: Cashback, employee discounts, salary sacrifice, EAPs and financial guidance matter because they help people manage real expenses — not just access benefits that sit unused in a portal.
3. The goal is no longer just offering benefits; it’s creating everyday value: The strongest employer support connects money, health and recognition in one accessible experience, helping employees reduce pressure, build financial resilience and feel supported through work and life.
Got time to stick around? Let's dive a little deeper.
The headlines may have changed, but the pressure hasn't disappeared.
While inflation has fallen significantly from its 2022 peak, many households continue to feel squeezed. Food prices remain substantially higher than they were a few years ago, housing costs continue to rise, energy bills remain elevated, and wage growth has struggled to keep pace with the cumulative increase in everyday expenses.
For many employees, the cost-of-living challenge isn't a temporary crisis.
It's become daily life.
When people worry about paying bills, covering childcare costs or stretching their grocery budget until payday, that pressure doesn't stay at home. It follows them to work.
That's why the cost of living is not simply a personal issue.
It's a workplace issue.
Employers may not be able to increase salaries every time prices rise, but they can help employees make their income go further while reducing financial pressure and supporting overall wellbeing.
The question is no longer: "What benefits do we offer?"
It's: "Which benefits genuinely help people cope with the realities of everyday life?"
Quick takeaway:
Cost-of-living support works best when it helps employees with the spending they already do — not when it asks them to search for value hidden inside a benefits portal.
A review: Inflation vs pay increase
Inflation may have fallen, but prices didn't go back down. Employees are living with the cumulative impact of several years of above-normal inflation, while pay rises have only gradually caught up.
| Year | CPI Inflation (Annual) | Median Full-Time Pay Increase* | Real Pay Impact |
| 2022 | 7.9% | ~6.0% | Pay lagged inflation |
| 2023 | 6.8% | ~6.5% | Broadly flat in real terms |
| 2024 | 3.3% | ~5.9% | Pay outpaced inflation |
| 2025 | 3.6% | 5.3% | Moderate real pay growth |
| 4-year total | +23.4% cumulative inflation | ~25.3% cumulative pay growth (not compounded) | Households still feel pressure due to permanently higher living costs |
Sources: Office for National Statistics CPI datasets and UK inflation series
The employee benefits that matter most when costs rise
As organisations look for effective ways to provide cost of living support for employees, many are reassessing the role of benefits in the overall employee experience.
The most effective rising cost of living employee benefits are those that help reduce everyday expenses, improve financial resilience and support wellbeing. From employee discounts and cashback to salary sacrifice schemes UK, employers are increasingly looking beyond traditional perks towards benefits that create measurable value in everyday life.
This shift reflects a growing recognition that workplace financial support plays an important role in helping employees navigate economic uncertainty. When benefits actively help people manage the cost of living, organisations can improve both employee wellbeing and business outcomes.
| Cost Pressure | Change Since 2022 |
| Food prices | +27% |
| Private rents | +8.7% year-on-year (2025) |
| Full-time nursery care | £15,865 per year |
| Inflation peak | 11.1% (October 2022) |
| Low-income households going without essentials | 7.1 million |
| Adults borrowing more due to living costs | 22% |
Sources: Joseph Rowntree Foundation, Cost of Living Tracker, Summer 2025, ONS, Coram Family and Childcare
Quick takeaway:
On paper, wages have largely caught up with inflation. In reality, employees are still paying significantly more for food, housing, childcare and energy than they were four years ago. That's why the cost-of-living conversation is no longer just about pay rises. It's about helping people reduce everyday costs, stretch their income further and build financial resilience for the future.
Explore our guide to strengthening your employee value proposition (EVP) with cost-effective employee benefits that stretch your employees' money further.
Why employees still feel under pressure
The UK economy has experienced several years of significant disruption that affect your employees' ability to cope with cost of living increases .
Inflation reached a 41-year high of 11.1% in October 2022 (Office for National Statistics). Although it has since reduced, prices rarely return to previous levels. Instead, households continue paying higher prices for essentials including food, housing, transport and utilities.
As we explore in our blog, ‘What is employee financial wellbeing? A practical guide for UK employers’, inflation is no longer the only, or even the dominant issue.
Employing people in the UK is more expensive than ever due to employer NIC and minimum wage increases, and many retailers are having to pass those extra overheads onto consumers.
At the same time:
- Mortgage and rental costs have increased
- Energy bills remain higher than pre-2022 levels
- Food prices remain significantly above historic averages
- Childcare costs continue to rise
- Consumer debt remains a concern for many households
For many employees, pay increases have helped, but not enough to fully offset several years of cumulative cost increases.
Employees don't experience inflation as a percentage. They experience it when the weekly food shop costs more, childcare fees rise again, energy bills increase or an unexpected expense lands at the worst possible time.
That gap between wage growth and living costs is why so many employees continue to feel under pressure despite signs of economic recovery.
The value of workplace support has never been more important.
Quick takeaway:
Employees do not experience financial pressure as an economic headline. They experience it through groceries, rent, bills, childcare and unexpected costs, which is why benefits need to feel practical and personal.
Which employee benefits do employees value most during periods of inflation?
When household budgets are under pressure from inflation and other factors, employees typically prioritise benefits that deliver immediate, visible value. Benefits such as cashback programmes, employee discounts, salary sacrifice schemes and practical financial support often rank highly because they help reduce everyday spending.
Benefits that reduce the cost of living can create value every week, helping employees stretch their income further without changing their behaviour.
The key lesson for employers is simple: employees value benefits they can feel. The more frequently a benefit improves daily life, the more likely employees are to recognise its value.
Quick takeaway:
The more often an employee uses a benefit, the more visible its value becomes. Everyday savings are easier to recognise than occasional perks.
The hidden cost of financial pressure
Money worries rarely stay contained to home-life, causing business impacts due to reduced productivity, increased levels of absenteeism, poor employee mental health and even higher levels of employee turnover.
In fact, research consistently shows links between financial stress and:
- Poorer mental wellbeing
- Higher anxiety levels
- Reduced productivity
- Increased absenteeism
- Lower engagement
- Greater employee turnover
When someone is worried about making rent, paying for school uniforms or covering unexpected expenses, their ability to focus on work naturally suffers.
This is why we believe financial pressure should never be viewed as a personal failing.
Life happens. Economic conditions change. Unexpected costs appear.
Supporting employees through these moments is no different from supporting physical health or mental wellbeing. It's part of creating an employee experience that works in the real world.
Quick takeaway:
Financial wellbeing and employee wellbeing are connected. When money pressure reduces, employees have more space to focus, recover and feel supported.
What benefits actually make a difference?
Not every benefit makes the same difference, and employees increasingly prioritise benefits that help them save money on spending they're already doing rather than benefits they may use once a year.
Here are some of the employee benefits during a cost-of-living crisis that can have the greatest real-world impact.
| Benefit type | How it helps employees | Why it matters when costs rise |
| Cashback on everyday spending | Gives employees value back on regular purchases such as groceries, fuel, clothing, technology and household essentials. | Creates visible, repeatable savings on spending employees are already doing. |
| Employee discounts | Reduces the cost of everyday essentials, family activities, holidays and larger household purchases. | Helps take-home pay stretch further without relying on a pay rise alone. |
| Salary sacrifice schemes | Helps employees access higher-value products or services through tax-efficient salary deductions. | Makes larger purchases feel more manageable while creating value for employees and employers. |
| Employee Assistance Programmes | Provides access to financial guidance, emotional support, counselling, legal advice and practical help. | Supports employees before money worries become wider wellbeing or performance issues. |
| Financial education and guidance | Helps employees build confidence with budgeting, saving, debt management, pensions and life planning. | Strengthens longer-term financial resilience alongside immediate cost-of-living support. |
1. Cashback on everyday spending
One of the simplest ways to reduce financial pressure is helping employees spend less on essentials.
Benefits that reward everyday spending on groceries, fuel, clothing, technology and household purchases can create year-round value without requiring employees to change their behaviour.
That’s why solutions like the Pluxee Cashback Card can make a meaningful difference.
Instead of waiting for annual reward moments, employees receive value every time they shop with participating retailers – and there are over 80 to choose from, including the top UK supermarkets.
The result is a benefit employees can use regularly rather than occasionally. Because value that is experienced is more powerful than value that simply exists.
The benefits platform at Salford has contributed significantly to my wellbeing. I like the wide variety of offers available and the selection of options, including prepaid cards, cashback, and general discounts. In a cost-of-living crisis, it's really useful to know that we have lots of options to save even more money.
Dean Brown, University of Salford case study
2. Employee discounts
Employee discount programmes remain popular for one reason: They help stretch take-home pay, making the items employees need cheaper at the point of sale.
Whether employees are buying groceries, booking holidays, paying for family days out or replacing essential household items, discounts can reduce everyday spending across multiple areas of life.
The most successful programmes focus on relevance.
Employees are far more likely to engage with discounts they can use weekly than benefits designed for occasional use.
3. Salary Sacrifice Schemes
Salary sacrifice schemes continue to offer a tax-efficient way for employees to access products and services that may otherwise feel unaffordable.
Examples include:
The salary sacrifice schemes UK employers offer can help employees spread the cost of larger purchases while creating tax savings for both employees and employers.
4. Employee Assistance Programmes (EAPs)
Cost-of-living challenges affect more than bank balances. They affect mental health too.
An Employee Assistance Programme provides access to professional support, including:
- Financial guidance
- Mental health support
- Counselling services
- Legal and practical advice
When employees have somewhere to turn during periods of financial stress, they are better equipped to manage challenges before they become crises.
5. Financial Education and Guidance
Knowledge alone won't solve the cost-of-living challenge.
However, many employees still value support with:
- Budgeting
- Saving
- Managing debt
- Understanding pensions
- Planning for major life events
Financial education works best when paired with practical tools that help people act on that information.
Quick takeaway:
The strongest support combines immediate savings with longer-term resilience, helping employees manage today’s costs while preparing for tomorrow’s surprises.
Are cash bonuses or employee benefits better for cost-of-living support?
Cash bonuses and employee benefits both provide cost-of-living support. To answer the question about which is better, we must consider what provides employees with more value in the longer term, and what is financially sustainable for the employer to offer.
Many employers instinctively think about one-off cash bonuses when living costs rise.
While bonuses can provide short-term relief, their impact is often temporary. Once employees have spent the money, the support ends.
Benefits work differently.
Cashback, employee discounts, salary sacrifice schemes and workplace financial support can continue delivering value throughout the year, helping employees reduce day-to-day expenses month after month.
Employees need both.
Fair pay remains fundamental. However, organisations that combine competitive pay with benefits that support financial resilience often create greater long-term value than those relying solely on salary increases.
The most effective question is not whether bonuses or benefits are better. It's how both can work together to help employees navigate rising costs.
What are the highest-impact low-cost employee benefits?
Employee discounts, cashback cards, salary sacrifice schemes, financial education, EAP and even rewards fall into the category of high-impact, low-cost employee benefits.
Supporting employees through rising living costs doesn't always require significant budget increases. Some of the highest-impact benefits are relatively low-cost to provide:
1. Employee discounts and cashback
Helping employees save on everyday spending delivers immediate value and encourages regular engagement.
2. Salary sacrifice benefits
Tax-efficient schemes can make larger purchases more affordable while increasing the overall value of an employee's reward package.
3. Recognition and rewards
Recognition helps employees feel seen, valued and appreciated at a time when external pressures are increasing.
4. Employee Assistance Programmes
Providing access to emotional, financial and practical support can help employees manage stress before it affects performance or wellbeing.
5. Financial education
Tools and resources that support budgeting, saving and financial planning can strengthen employee financial resilience over time.
The best benefits do not simply exist. They solve real problems people face every day.
Why you can’t separate money and health
We shouldn’t separate money and health – financial and physical wellbeing – because they both impact the other. Money worries cause stress, and heath issues can affect our ability to manage our money or, in some cases, work as much as we may need to.
Too often, organisations treat financial support and wellbeing support as separate conversations.
Employees don't.
When people feel financially stretched, the consequences often show up as:
- Stress
- Anxiety
- Poor sleep
- Burnout
- Reduced productivity
Supporting financial resilience therefore supports mental wellbeing too, which is why modern employee experience strategies increasingly connect money, health and recognition rather than treating them as isolated benefits categories.
The most effective support reflects how people actually experience life.
As one connected experience.
Financial wellbeing vs financial resilience: What's the difference?
Financial wellbeing describes how people feel about their financial situation today, whereas financial resilience refers to our ability to cope with unexpected outgoings and our future comfort.
With financial wellbeing, people often ask: Do they feel in control? Can they comfortably cover their expenses? Are they worried about money?
Financial resilience is different.
It reflects a person's ability to cope with unexpected costs, economic uncertainty or significant life events without experiencing serious financial hardship.
For employers, supporting employee wellbeing and cost of living challenges means addressing both.
Employees need help managing today's pressures while building the confidence and stability needed for tomorrow.
At Pluxee, we believe the goal is not simply financial wellbeing. It's helping people build stronger financial resilience across every stage of life. Read more about this in our blog, 'How to improve employee financial resilience.'
From benefits to value: The next evolution of employee support
The most important shift happening in employee benefits isn't the introduction of new products. It's a shift in perspective. Employers are moving from asking: "What benefits should we offer?" to asking: "What support will employees genuinely value?"
Today's employees increasingly expect an employee experience platform that goes beyond administration and enrolment. They want a single destination that helps them save money, support their health, access recognition and discover benefits that reduce the cost of living.
That's the thinking behind the Pluxee Employee Experience Platform.
Rather than creating separate destinations for rewards, wellbeing and benefits, the platform brings support together in one mobile-first experience designed around how people live, spend and work today. It combines support across our Money, Health and Recognition pillars to help people reduce financial pressure, support their wellbeing and feel valued at work.
Through the platform, organisations can combine:
- Everyday savings and cashback
- Employee discounts
- Salary sacrifice schemes
- Health and wellbeing support
- Recognition and rewards
- Engagement insights and reporting
Because support delivers the greatest impact when employees can find it, access it and use it.
Quick takeaway:
Value increases when support is connected. A single employee experience platform can make money, health and recognition benefits easier to discover and easier to use.
The real question employers should be asking
The cost-of-living challenge has exposed a bigger truth.
Employees are increasingly evaluating their employer's support through the lens of everyday value. They want employee benefits during a cost-of-living crisis that help them spend less, save more and feel supported through every stage of life.
A salary increase matters.
So does saving money on the weekly shop, support during difficult moments, and access to benefits that reduce financial pressure before it becomes a wellbeing issue.
Whether through employee discounts and cashback, salary sacrifice schemes UK, wellbeing support or recognition programmes, the most effective benefits are those that help employees overcome the pressures created by rising living costs while building greater financial resilience for the future.
The organisations that stand out won't necessarily be those spending the most.
They will be the organisations helping employees experience the most value.
Because value isn't what organisations provide.
It's what people experience.
Key takeaway:
The best cost-of-living benefits are not always the biggest or most expensive. They are the ones employees notice, use and feel in real life — because value is only meaningful when people experience it.
FAQs: Cost-of-living employee benefits
What benefits help employees with the cost of living?
The benefits that help employees most with the cost of living are those that reduce everyday expenses or provide practical support when money feels stretched. Cashback, employee discounts, salary sacrifice schemes, Employee Assistance Programmes and financial education can all help employees manage rising costs in ways they can feel regularly.
How can employers support employees during rising living costs?
Employers can support employees by making benefits easier to find, understand and use. That means offering practical tools that help people save on everyday spending, access financial guidance, use wellbeing support and receive recognition in one connected employee experience.
Are employee benefits better than a pay rise?
Employee benefits should not replace fair pay, but they can add value alongside it. A pay rise helps income, while benefits such as cashback, discounts and salary sacrifice can help employees reduce regular costs throughout the year. The strongest approach combines competitive pay with benefits that support everyday financial resilience.
What are low-cost employee benefits with high impact?
Low-cost, high-impact benefits often include employee discounts, cashback programmes, recognition, financial education and Employee Assistance Programmes. These benefits can be effective because they solve real problems employees face without always requiring a large increase in reward budget.
Why is financial wellbeing important for employee retention?
Financial wellbeing can influence how supported, focused and valued employees feel at work. When money worries increase stress or reduce engagement, employees may be more likely to feel disconnected from their employer. Benefits that reduce financial pressure can therefore support retention by helping employees experience more value from their workplace.
What is the difference between financial wellbeing and financial resilience?
Financial wellbeing is about how employees feel about their money today, including whether they feel in control and able to meet their regular costs. Financial resilience is about their ability to cope with unexpected expenses, changes in income or major life events without serious financial strain.
How can an employee experience platform improve benefits engagement?
An employee experience platform can improve benefits engagement by bringing money, health and recognition support into one accessible place. When employees can quickly find relevant benefits, understand how they work and use them in daily life, they are more likely to experience the value their employer provides.
Sources:
Office for National Statistics
Office for National Statistics CPI datasets and UK inflation series
What is employee financial wellbeing? A practical guide for UK employers | Pluxee UK
Salary Sacrifice Schemes | Pluxee UK
Employee Discounts Platform | Pluxee UK
Employee Assistance Programme| Pluxee UK
Cycle Benefit Scheme | Pluxee UK
How to improve employee financial resilience | Pluxee UK
Annual Leave Purchase Scheme | Pluxee UK
A cost-effective guide to strengthening your EVP | Pluxee UK
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