Most UK employees are not expecting a Christmas bonus this year, with new data suggesting financial incentives are falling out of favour and staff instead want ongoing support to manage the rising cost of living.
Research by Epassi UK, an employee benefits technology provider, reveals falling expectations and growing anxiety around seasonal rewards.
Fewer than one in ten employees expect to receive a larger Christmas bonus this year, with six in ten reporting they are not anticipating any bonus at all. With household budgets under pressure, the traditional year-end payout appears to be losing its power to motivate staff or provide meaningful financial help.
The findings reflect wider questions facing employers about how to reward and retain staff in a challenging economic climate. Demand is growing for more substantial and continuous benefits, as employees weigh up job offers and satisfaction based on the overall support available to them rather than one-off festive payments.
Bonuses still valued but many fear they are vanishing
While Christmas bonuses remain important for those who receive them, the research shows that seven in ten employees who expect a bonus say it helps keep them motivated and improves business performance. More than half describe the payment as a financial lifeline, and two in five admit they could not afford Christmas without it.
Despite this, nearly half of employees who expect a bonus this year believe it could be their last. Many now worry that the cost of living crisis and shifting business priorities are making bonuses a thing of the past. “Although many employees are resigned to not receiving a bonus from their employer, there is strong demand for financial support throughout the year to help them with rising living costs,” said Matt Russell, chief executive at Epassi UK and Zest, a benefits platform acquired by Epassi earlier this year.
Russell said staff want reliable and ongoing help, rather than a single end-of-year payment. He told HRreview, “Ongoing financial support delivered through benefits packages is a cost-effective approach for employers to reward staff, keeping them motivated which in turn boosts talent retention and productivity.”
Staff want benefits, not just parties or bonuses
The survey, conducted by polling firm Opinium and involving 2,000 adults, reveals a change in what employees value most. Nearly six in ten said they would prefer employers to invest in better benefits throughout the year, rather than spending on a Christmas party or one-off bonus. More than half think the money allocated to workplace festivities would be better used to support employees’ financial wellbeing.
The importance of benefits was echoed in separate research by Zest. It found that six in ten employees rate a company’s benefits package as the most important factor when deciding where to work. Yet more than half believe their current workplace benefits are inadequate, underlining the need for employers to rethink how they support and reward staff.
HR experts say that with bonuses now less reliable, companies risk losing talent if they do not invest in packages that meet staff needs. There is growing evidence that wellbeing and financial security are priorities for jobseekers, especially as inflation and living costs remain high.
