Gallagher: Why Benefits Strategies Fail by Generation

Global insurance and risk management consultancy Gallagher reveals how employee benefit preferences shift across generations.

Through the analysis of 65,000 UK employees, Gallagher found that young workers – aged 20-29 – prioritise lifestyle benefits, such as annual leave, whereas older employees – aged 50-59 – value protection benefits, including income protection and critical illness cover. 

However, many employers fail to offer these protections, highlighting a gap between what employees want from benefits packages, and what is being offered by employers. 

Top employee benefits across generations

Just 4% of young employees name income protection as an important “perk”, compared to 12% of older employees – yet less than a quarter (24%) of employers offer income protection to their workforce.

“As people move through their lives and careers, it's natural that their priorities change,” said Alistair Dornan, Gallagher's Benefits & HR Consulting Division's Managing Director of UK Benefits. “Early career employees often place greater value on lifestyle led benefits such as holiday trading or gym membership. As responsibilities grow, protection benefits – particularly income protection and critical illness cover – become increasingly important.”

Holiday trading was found to be the most popular benefit across all age groups, with uptake rising from 18.88% among young employees to 23.94% among the oldest demographic. Employees ages 30-39 (19%) and 40-49 (22%) also named holiday trading as their number one perk.

Beyond this consistent preference, benefit choices fluctuate depending on life stage, with those in their 20s prioritising dental insurance (12%) and travel insurance (9%). Critical illness insurance was stronger for those in their 30s (19%) and 40s (22%), with 50 year olds shifting their preferences toward private medical insurance (19.52%), reflecting the desire for comprehensive health protection. 

Dental insurance remained a steady third choice for most age groups, featuring in the top three for all but the 40-49 cohort. 

Key takeaways for HR leaders

As holiday trading was named as the most popular flexible benefit across the board, the data highlights that employees have an ongoing interest in flexible working arrangements.

The appeal of the benefit strengthens across career stages, climbing from 19% among 20-29-year-old workers to 24% in the 50-59 bracket, suggesting that flexibility increases in importance as personal and work commitments increase. 

Despite this clear demand, only 72% of Gallagher's client base currently offers holiday trading, suggesting a significant opportunity for employers to boost engagement and satisfaction by making this popular benefit more widely available.

“Employers shouldn't rely on long-held assumptions about what their workforce wants,” Alistair added. “Our data shows clear, evolving patterns in employee behavior, and organisations that use these insights can design benefits that genuinely align to life stages and real employee needs.”

In conclusion, Alistair said: “My message to employers is simple: let the data guide your decisions. Use insight to modernise your benefits strategy, close the gap between what you offer and what your people value, and strengthen financial resilience and long-term retention across your organisation."

Gallagher drew this analysis from benefit selections made by approximately 65,000 UK employees across 25 companies using Gallagher Guide, its employee benefits platform. The platform combines intuitive design with real-time insights to help HR teams streamline benefits administration while empowering employees.