UK workers want more than a pay rise as cost-of-living pressure reshapes workplace benefits

• 80% of UK employers say employee pay expectations have risen because of the cost of living
• 47% of UK workers want additional days off, compared with just 17% have access to this benefit 
• Almost six in ten (59%) employers are exploring benefits and other non-salary options to strengthen their employee offering while reducing costs

The traditional pay rise may no longer be the only answer to keeping UK workers happy, as new research reveals employees increasingly value benefits that give them greater financial security, flexibility and time.

New findings from HR. pay and timespecialist SD Worx reveal a growing tension between household finances and employers' ability to meet rising salary expectations. Eight in ten (80%) UK employers say employees' pay expectations have increased because of the higher cost of living. However, just 39% of UK employees feel their pay has kept pace with the cost of living, while almost a third (32%) say they are experiencing financial stress.

With continued pressure on both household and business budgets, employers are increasingly looking beyond headline salary to make their overall reward packages work harder. 59% of UK employers say they are exploring benefits and other non-salary options to improve their employee value proposition while reducing costs.

Time is becoming a valuable workplace currency

For employees, one of the clearest opportunities is not necessarily more money, but more time.

Almost half (47%) of UK employees say they would like to receive additional days off as a workplace benefit, making it the most sought-after workplace reward. However, just 17% currently receive additional leave, creating a 30-percentage-point gap between what workers want and what they actually get. Flexibility also remains high on the wish-list. More than a third (36%) would like flexible working hours, while only 32.5% say they currently receive them. 31.5% would also like access to health and wellbeing programmes.

The findings suggest that, at a time when simply increasing salaries may be difficult for some organisations, employers could have an opportunity to rethink the value of their overall package and focus on benefits that employees would genuinely value. 

Financial security is moving up the benefits agenda

That does not mean money has become less important. Instead, employees appear to be thinking more broadly about financial security. 40% of UK employees say they value pension and retirement planning support, making it considerably more attractive than performance-related pay (24%) or pay linked to skills and competencies (23%).

UK employers are already comparatively strong on pension provision, with 59% offering pension plans , compared to their European counterparts (31%), and a third (33%) providing retirement planning support. But against a backdrop of continued pressure on household finances, the findings suggest employees are looking beyond their monthly salary towards benefits that can provide greater financial resilience over the longer term. Other financial benefits are also attracting interest. Three in ten employees value discounts or support with the cost of living, while 29% value transparent information about pay levels and fairness and 28% want a clear overview of their total rewards and benefits.

Pay is about trust as well as pounds and pence

Transparency could prove particularly important as employers try to demonstrate the true value of their reward packages. Nearly three-quarters (72%) of UK employees say pay transparency is important or very important when deciding whether to join or stay with an organisation.

Yet there are signs that conversations about pay remain difficult. While 65% of managers are considered confident discussing pay and reward with employees, just 38% of employees themselves feel comfortable discussing or asking for a pay increase.

The findings form part of SD Worx's HR & Payroll Pulse 2026 study, which surveyed 5,936 HR decision-makers and 16,500 employees across 16 European countries.