By John Simpson 13 April 2012
A survey released by ACFO suggests that only 0.58% of employees that can take advantage of the schemes actually do; a proportion well below what many providers claim.
Announcing the report, ACFO Chair Julie Jenner said: “Our survey reveals that take-up would appear to be significantly below that indicated by many of the providers of such schemes.
“Organisations may have a large number of employees and may have implemented schemes, but the reality would suggest that car salary sacrifice only appeals to a miniscule number of employees.
“Whenever a new product is brought to the market, it is inevitably heavily hyped by providers but the reality often proves to be somewhat different.”
Tusker disputes ACFO’s findings, pointing out that average take-up of its SalarySacrifice4Cars (SS4C) scheme is 4.5% across schemes that have been running for 12 months or more, rising to 6.8% for schemes that have been running for over double that.
David Hosking, Tusker MD, could only speak for his company and admitted that a small number of its schemes had seen take up of just 2-3%, however insisted that these were a rarity and can usually be attributed to the demographics and geographical location of the employee base.
He commented: “I think there has been a basic misunderstanding in some quarters of what salary sacrifice car schemes are actually offering and who they are aimed at.
“Typically, they do not impact greatly on the type of company fleet that fleet managers normally run.
“We actually believe the ‘traditional’ company car fleet and salary sacrifice car schemes are complementary and not mutually exclusive, as we provide vehicles for both.”
Mr Hosking added that widen employee choice just like pensions and health insurance and that several things need to be done to achieve a higher take-up rate.
He explained: “We recently launched a scheme to a utilities company with 10,000 employees and have seen 475 orders placed thus far in just over 12 months.
“This is typical of the level of take-up our schemes enjoy and, in addition to the significant savings in tax and NI for the employees, the employer has made projected savings in employers’ NI of well over £400,000 on the orders placed so far and we expect this to increase to around £800,000 over the three-year term of the scheme.”
Categories: Fleet news
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