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Guest Blog: Tusker talks affordable salary sacrifice car schemes in a costly world

uploaded on 21 May 2024

At Reward Gateway | Edenred, we work closely with our partner Tusker to bring private and public sector employees the market’s leading green car benefit scheme. In this guest blog, Tusker explains how you can provide this sought-after benefit and make savings with a car scheme that will help you achieve ESG (environmental, social and governance) goals, support employee financial wellbeing and fulfil your duty of care.

At a time when the cost of living continues to soar, we’re finding that more and more organisations are looking at innovative ways to help their employees save money while maintaining their own spending targets.

Benefits have long been a way of providing employees with something valuable in addition to remuneration, and a brand-new electric or hybrid car on a salary sacrifice scheme can be a great way to make salaries go further.

Car salary sacrifice schemes are not a new solution, but one which is seen as an affordable way to drive electric, hybrid or ultra-low emission cars. Tusker first started offering salary sacrifice schemes in 2008, with the first EV on the scheme in 2011, but there has been a fast transition in the past four years.  More and more people are choosing greener options which are cost effective on the scheme.

As it always has done, Tusker provides a more affordable option to manage the expense of running a car. The scheme provides a fixed-cost, inclusive solution so there are no unexpected surprises and no mid-term price rises.

Coupled with this, drivers don’t need to find hefty deposits and have lifestyle protections should circumstances change, so it’s easy to see why the Tusker scheme is often viewed as the peace of mind solution.

The additional bonus is that with two thirds of people able to charge at home* and take advantage of cheaper charging rates for their electricity, drivers are reporting savings of £1000 a year in fuel alone; many EVs can be fully charged for less than £6 under EV energy tariffs widely available from a variety of energy suppliers.**

The fuel savings are in addition to the savings that employees are able to make using the salary sacrifice scheme through the combination of tax and NI savings. On average, drivers on the Tusker scheme saved more than £320 a month in 2023 – savings which are not available via traditional leasing options, and savings which make cars on the Tusker scheme affordable for a lot of employees.

Public sector employers are also able to make significant savings on EVs, not just in Class 1A NI but also potentially pension contributions, as the amount for the car is deducted from gross salary. As an example, many Local Authorities or NHS Trusts report average savings per EV of around £6000 over a typical term, meaning just 50 EVs would generate around £300,000 in employer savings.

Meeting duty of care requirements

There is also one area of employee wellbeing (and by extension the employer’s duty of care) which can sometimes be overlooked – employee commuting and travel. While salary sacrifice season ticket schemes for train travel aren’t particularly new in the benefits space, they’ve increasingly been appreciated for their environmental credentials and for the ability to contribute towards employees’ financial wellbeing. With 50% of the UK’s working population commuting to and from work by car, employee benefits that help employees with sustainable travel are on the rise.

The introduction of the Health and Safety at Work Act 1974 meant that employers had to take appropriate steps to ensure the health and safety of their employees when they are driving or at work, whether this is in a company or hired vehicle, or in the employee's own vehicle. This becomes trickier to manage when employees use their own vehicles for work-related travel, as the employer has less oversight on the age, condition and insurance-status of their cars.

An easy, cost effective and incentivising solution is the introduction of a salary sacrifice car benefit programme to a benefits scheme. These schemes offer employees access to highly affordable, low emission vehicles, which due to the way salary sacrifice is structured are beneficial for not just the driver, but for employers’ duty of care responsibilities as well.

For most employees, after housing, a vehicle will be their biggest cost, so organisations that can offer their employees access to affordable cars, especially electric cars, report a huge increase in the ability to attract and retain talent.

Not only will this provide new, and therefore safe vehicles for employees to drive, but crucially, the scheme’s insurance includes both commuting and business use. So whatever happens on the road, the employee will always be appropriately insured.

To support organisations’ ESG goals, Tusker also offsets any tailpipe emissions on cars using verified carbon offsetting schemes. Even EV drivers can support this, as Tusker offsets the charging emissions on each electric car on the worst-case assumption that every EV being charged is with non-green tariffs. This carbon offsetting programme can contribute to an organisation’s Scope 3 reporting and green travel plans. 

If you’re looking to add to your benefits with a scheme which can save money and boost your ESG credentials, get in touch with Reward Gateway | Edenred who can answer any initial queries and introduce you to the Tusker team. With the most experience and the largest number of salary sacrifice cars on the UKs roads, we’re best placed to help you successfully launch and manage a successful car benefit scheme.  

 

*source: British Gas

** source: Tusker data

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