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Planning a new job for 2018? Make sure you’ve squeezed all you can from this one first

Investors in people have released their annual job satisfaction survey. You can find it here.

  • One in four people are unhappy in their job, and one in five are currently job hunting.
  • The most common reason to move is being unhappy with your boss, followed by wanting a better salary.
  • Before you look elsewhere, however, it’s important to understand the value of the job you’re leaving behind and whether you can squeeze more out of your employer without having to go anywhere.
  • We reveal five valuable employee benefits and how to make the most of them.

Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown:

“Almost half of UK workers plan to change jobs in 2018, and one in five people are actively job hunting at the moment. Dissatisfaction with pay is the second most common reason for making the move - after unhappiness with the way you are being managed.”

“If you're currently battling the boss from hell, then there’s probably nothing on earth that would persuade you to stay put. However, if you’re going in search of more money, it’s vital to take stock before you start, and get a handle on the total value of everything your employer offers. Pay isn’t all about your salary: employee benefits such as pension contributions are highly valuable. Going through this process, you may even find ways to boost your package without all the bother of a move.”

5 valuable employee benefits and how to make the most of them

1. Consider your pension.

The average employer with a defined contribution pension puts in 3.2% of salary, but some pay the minimum required by auto-enrolment of 1%, and some pay as much as 10%. Meanwhile, the average employer with a defined benefit pension puts in 16.9% of salary. For someone on £30,000-a-year, the gulf between the minimum DC and the average DB scheme is worth almost £5,000 a year. Check what your current employer offers, so you can compare it to the pension scheme offered by any potential future employer.

If you’re planning a move because you want additional cash in your pocket, then this isn’t going to help, but if you just want to be more rewarded for your efforts, you may be able to squeeze money from your employer by diverting more of your salary into your pension. Around two in three big employers with defined contribution schemes offer some kind of matching deal, where for every extra pound you contribute to your pension, they will increase their contributions.

2. Don’t forget your life cover

Nine out of ten employers offer a payment of several times your salary if you die while in employment, and more than half pay for income protection (which will pay a regular income if you are unable to work for a while). One in ten people will have a prolonged period of sickness during their career, so it’s important not to underestimate the value of this kind of cover. By the age of 50 you can easily be paying £50 a month for income protection and £20 a month for life cover, so if your employer offers it, it could be worth £840 a year to you.

3. Consider the value of any medical insurance

One in five employees have private medical insurance, which would cost an average of just under £1,500 a year to replace. They will pay tax on their cover as a benefit-in-kind, but this is a drop in the ocean compared to the cost of a stand-alone policy.

4. Save as you earn schemes

You can pay a monthly sum into these schemes, and after a period of 3 or 5 years, you’ll get a bonus. At that point, you can buy shares in your employer at a fixed price. If the share price has risen during the period you can buy at a significant discount, and if it has fallen, you can simply get your savings back – with the bonus. If your employer offers a scheme like this, and you’re not a member, it may be worth joining and giving yourself the chance of a windfall further down the line.

If you are currently in a scheme, then moving employers means leaving it early, so you will simply get your savings back and lose the chance to buy the shares – so consider what you stand to lose. In some cases a new employer may compensate you for these or other types of share options you may have to forgo.

5. See whether there are other benefits on offer

In addition to your core benefits, there are a host of other benefits you may be able to opt for. Tax-free childcare vouchers, tax-efficient computer or bike schemes, season ticket loans, cheaper insurance cover and discounted shopping vouchers could be worth hundreds, or even thousands, of pounds a year.

Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown:

“It’s easy to be drawn in by the headline salary, but take the time to dig a bit further before making any rash decisions. Take someone in a £25,000-a-year job, with a DC pension offering an employer contribution of 10%, life cover, income protection, PMI and childcare vouchers. If they were offered a £30,000 a year job with only a 1% pension contribution and no other benefits, they would actually be financially better off staying put.”

“If, after all this, you are still keen to hunt down a better-paid job, don’t forget about the pension you have built up with your existing employer. If you are happy with the scheme, make sure you store your documents carefully and keep your address up-to-date, so you don’t lose track of it.”

“If you aren’t enamoured with the scheme, or if you have a number of old workplace pensions, and no valuable guarantees or penalties for leaving, it’s worth considering consolidating them into a more modern pension plan. This will help you keep track and manage your money more easily online or on your mobile phone. It may well also have lower charges and more investment options than some older schemes.”