UK employers “wasting wellbeing spend” as almost half of workers ignore their benefits

Almost half of UK employees are failing to use all the workplace benefits available to them, leaving employers with the highest benefits underutilisation rate in Europe.

That is one of the headline findings from The Great Employee Benefits Study 2026, which surveyed 1,000 UK employees and 363 employers as part of a wider study across eight European countries.

The research, from Epassi, found that 49 per cent of UK employees did not use all of their workplace benefits during the past year, compared with a European average of 35 per cent. More than half (54 per cent) said the main reason was that the benefits on offer simply did not match their interests.

The findings suggest the challenge for employers is no longer whether they invest in wellbeing, but whether employees see enough value and relevance to engage with what is being offered.

The report warns that unused benefits represent a direct return on investment failure, with organisations spending money on schemes employees neither value nor use. It argues that better personalisation, easier access and more relevant benefits are now more important than simply increasing investment.

The study also highlights a widening disconnect between employers’ perceptions and employees’ experiences of workplace wellbeing.

While 82 per cent of UK employers believe they support employees’ overall wellbeing, only 67 per cent of employees agree. Similarly, 74 per cent of employers believe they encourage employees to be physically active, compared with just 53 per cent of employees who feel this is the case.

At the same time, wellbeing is becoming a more powerful driver of engagement than pay.

More than two-thirds (67 per cent) of UK employees said they would be more committed to their employer if it invested in their wellbeing rather than simply increasing salaries. Among Gen Z workers this rises to 72 per cent, underlining the growing importance younger employees place on health and wellbeing support.

Burnout also remains a significant workplace challenge. More than one in five European employees said their workload does not feel sustainable in the long term, while 32 per cent identified excessive workload and stress as the biggest barrier to their wellbeing. The report concludes that no wellbeing programme can compensate for structural overwork.

Despite this, employers continue to increase spending on benefits. Three-quarters (75 per cent) of UK employers expect their benefits budgets to grow in 2027, with training and development, mental wellbeing programmes and insurance remaining their top investment priorities. However, the report says the UK’s high underutilisation rate shows that investment alone will not improve employee health outcomes unless benefits are designed around employees’ changing needs.

The research also found growing demand for preventative health support. Among employees, mental health counselling (71 per cent), preventative health assessments (68 per cent) and time to be active during the working day (65 per cent) ranked among the most valued wellbeing benefits. Physiotherapy and injury prevention support (69 per cent) also emerged as one of the most sought-after physical health benefits, ahead of traditional gym access.

Financial wellbeing is another growing priority. Among employees dissatisfied with their benefits package, 19 per cent said the biggest problem was that benefits did not help reduce personal expenses, while one in 10 felt benefits were not being adjusted to reflect the economic climate.

The study concludes that relevance, rather than awareness, is now the biggest challenge for employers. Although 67 per cent of UK employees said they fully understand the benefits available to them, many still choose not to use them because they do not feel they offer meaningful personal value.