Flexible and voluntary benefits have only begun to gain popularity in the past 20 years, in line with a trend towards a more individualised approach to reward. The personalisation and flexibility of such schemes can address the diverse needs of the workforce, and also provide a cost-effective approach to benefits provision. When adopting such schemes, employers need to ensure that employees understand the reasons for and advantages of flexible benefits and the implications of their choices, making communication and education key elements in the provision of flexible and voluntary benefits.

This factsheet explores the background and rationale behind flexible and voluntary benefits, identifying the distinction between the two, and addresses the issues and considerations of organising and implementing flexible or voluntary benefits schemes.

CIPD viewpoint

What are flexible and voluntary benefits?

Scheme coverage and content

Organising and implementing flexible benefits schemes

Key issues for flexible and voluntary benefits schemes

Further reading

This factsheet was last updated by Charles Cotton.

Charles Cotton

Charles Cotton: Performance and Reward Adviser

Charles directs the CIPD's performance and reward research agenda. He has recently led research into: how employers can help improve their employees’ understanding of their personal finances; how front line managers make and communicate reward decisions to their employees; how employers manage the risks around reward; how private sector employers can build the business case for workplace pensions; how employees form their attitudes to pay; and how the annual pay review process can become more strategic. 

He is also responsible for the CIPD’s public policy reward work and has given evidence to select committees on banking pay, redundancy awards as well as responding to various consultations, such as on pensions, retirement and MPs’ expenses.

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