Employee benefits market trends 2024 

We share our 2024 outlook for the employee benefits market, plus conditions in healthcare, group protection, other benefits and pensions over the first half of 2024.

After a year of activity in 2023 driven by acquisitions, soaring medical inflation, high demand for treatment and changes in the workplace pensions environment, how will benefit markets fare in 2024? 

MMB's headline trends

Environmental, social and governance (ESG) considerations will start to shape benefits delivery. The use of both benefits benchmarking and smart pensions is set to increase. 
  • Environmental, social and governance

    MMB will continue to build on 2023’s market-leading work, redefining the way stakeholders think about ESG in regard to health and protection benefits. 
  • UK employee benefits benchmarking

    Employee benefits will remain key in talent recruitment and retention. By benchmarking benefits packages, businesses can make informed and competitive decisions. 
  • Smart Pensions

    Many UK businesses face challenges in providing workforce pensions and related benefits, in terms of affordability and access to technology. Mercer Smart Pension can assist employers keen to improve their pension offering. 


We anticipate continuing high usage of private health schemes and further price increases. Lower-cost products providing limited cover are likely to become more common.
  • Market trends

    • Scheme enhancements relating to diversity, equity and inclusion (DEI) will continue to be widespread. However, such changes will put further pressure on costs. 
    • Increased demand for neurodiversity services within the private sector is expected to continue in 2024 driven by delays within the NHS and the development of support available from providers 
    • There is growing interest among employers in expanding cover to dependents, and to previously ineligible employee groups. 
  • Funding

    • Cost pressures are putting increased focus on scheme design. Common design options that can impact cost include introducing or increasing an excess charge and broadening employee eligibility so as to reduce cost per member. Large schemes can control costs most effectively through their choice of scheme structure. 
    • Master trust: More employers are choosing a master trust arrangement, which has the benefit of outsourced governance. However, such arrangements may have limitations – for instance in regard to eligibility – which need to be considered. 
    • Standalone trust: Still the most common option for large schemes, with greater autonomy and flexibility to tailor provision. But with increasing numbers of high-cost claims, employers are looking at options such as specific or aggregate stop loss levels. 
    • Captives: There may be challenges for captives in balancing competitive pricing and premium volumes at a level that can still drive profit. 
  • Claims

    • As numbers of claims increased in 2023, providers boosted claims resources including helplines and this should improve call answer times in 2024. 
    • Although a lot of claims are being made, there is no evidence that they are becoming more severe. 
    • The upturn in claims around mental health conditions is expected to continue. 
  • Pricing

    • Large corporate schemes covering more than 250 individuals are being hit by high inflation, with increases of up to 40% anticipated for 2024 renewal terms. Smaller schemes may see increases of up to 20%.
    • Projections for future claims vary between providers, but most are taking a cautious approach.


Market consolidation through Aviva’s acquisition of AIG could reduce competition and availability of certain types of cover in 2024.
  • Market trends

    • Administration challenges such as slow claims handling and delays in renewals are likely to continue among providers. 
    • More employers will likely extend cover and added-value services to wider groups of employees.
    • Providers will continue to integrate their core propositions more closely with their added-value services, enabling richer insights.
    • Cost sustainability could come under pressure as the value-added services introduced by providers over the past few years are more widely utilised. Providers will need to ensure their core propositions keep pace with technological developments.
    • Ongoing wage growth and price inflation could mean more Group Income Protection policyholders increase their insured escalation rate. The widely used rate of RPI capped at 2.5% is now arguably too low. 
  • Claims

    • Group Life Assurance: Increasing use of online claims portals is set to improve efficiency and speed of payment.
    • Group Critical Illness: Overall, claim frequencies are likely to rise gradually, driven by the post-pandemic backlog of diagnoses and by improvements in diagnostics that means members can claim on more conditions.
    • Group Income Protection: We are seeing a significant upturn in demand for early intervention support. Work-related factors continue to result in claims being declined.
  • Pricing

    • Group Life Assurance: Prices will likely remain inconsistent, creating opportunities for savings through market reviews.
    • Group Critical Illness:  Prices are not expected to fall, due to delayed diagnoses causing an upturn in claims following the pandemic.
    • Group Income Protection: Prices are likely to remain competitive, reflecting continuing higher interest rates and yields. 

Other benefits

  • Private dental

    Cigna’s withdrawal from the market in 2023 has meant reduced competition at a time when demand for private dental cover is higher than ever. This is likely to push premium prices up. 
  • Virtual GP services

    Usage rose in 2023 and demand is expected to remain high in 2024.
  • Employee Assistance Programmes (EAPs)

    EAPs have become an integral value-added service from protection providers. They are evolving rapidly, with growing prevalence of app-based support for mental and physical health, and take-up is expected to continue to increase. 
  • Health screenings

    It is not uncommon to see employers spending large sums on screening programmes that have not been strategically reviewed since they were introduced. Given the range now available, employers are able to select strategically according to factors such as employee demographics and location. 


The government’s focus, outlined in its Autumn Statement, is on scheme consolidation, better outcomes for savers and more productive investment by pension schemes. 

  • Wage levels : Increases to the National Living Wage and National Minimum Wage mean that employers who operate a salary exchange arrangement need to conduct a review before April 2024, to ensure eligibility thresholds are still relevant. 
  • Lifetime Allowance (LTA) : This will be abolished from 6 April 2024, and the government has simplified some of the new requirements. We expect to see employers reviewing their pension cash alternative policies in 2024 consequently. Those who are eligible for LTA protection have until 6 April 2025 to apply for it. 
  • Auto enrolment : Reforms are expected to the system during 2024, including the lowering of the eligibility age from 22 to 18 and abolition of the lower earnings limit. This could have a significant impact on some employers. 
  • Education and engagement : This will remain a key theme in 2024, as growing numbers of scheme members seek support in funding and planning for their retirement.
Mark Waters

- Market Development Leader, UK, Mercer Marsh Benefits

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