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Survey defies austerity Britain

Scots prefer extra holidays to more pay

holidaysMost Scots would prefer to take five days extra holiday than receive a one-off bonus of £500, according to a new survey that defies politicians’ claims that the country is suffering from a cost of living squeeze.

Calls for an end to austerity may be high on politicians’s agendas but almost a quarter of Scottish and UK employees would also choose to invest in long-term savings plans such as their pension rather than take a £500 cash windfall.

According to the survey by accountants and business advisers PwC, only 17% opted to take a discretionary bonus award as extra pay, revealing a preference among employees for tax efficient savings.

The compilers said that when it comes to variable pay “it appears that most workers are balancing short-term consumption with longer term financial planning”.

The survey of more than 2,400 employees, including around 2oo in Scotland, also revealed that 35% of employees would prefer to purchase extra annual leave over any other new workplace benefit, with this rising to 47% among employees under the age of 20.

As well as varying by age, the desire to buy extra holiday also varies by sector. When asked if they would prefer extra holiday or a £500 discretionary cash bonus, two-thirds of individuals in professional services opted for extra holiday, while 58% of retail workers chose extra pay.

The importance of receiving cash over benefits increases, however, when employees are offered the opportunity to exchange 5% of their pay for a new workplace benefit.

In this scenario two-thirds of employees surveyed said that they would wish to maintain their cash rather than sacrifice 5% of their existing salary for any additional benefits.

With pensions and savings plans proving the most popular among respondents overall, the survey suggests that people do recognise the need to save for the long-term.

However, few would give up a portion of their existing salary for any other benefit, suggesting that they have little room for manoeuvre within their existing reward packages.

Gwyneth Scholefield, human resource services director at PwC in Scotland, said:  “With people still feeling the squeeze, despite record low inflation, it’s clear that they value benefits that will save them money.

“One of the most popular options chosen by Scottish and UK workers are long-term savings vehicles such as pensions suggesting that people recognise the need to save for the long-term rather than spend their earnings on immediate consumption.

“What is  interesting is that employees are more likely to sacrifice discretionary pay such as a bonus for additional benefits and that funding additional holiday from work ranks as one of the most popular ways of using such a windfall

“There are also commercial benefits  in creating more flexible employee reward programmes. By better understanding their people and the diversity of their workforce, businesses could design a reward programme that takes account of individual preference – a move that could bring significant cost savings and stop employers wasting valuable cash on benefits that are simply not valued by everyone.”

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