What are home technology schemes?
A home technology scheme allows employees to purchase a new piece of technology and spread the cost through monthly payments.
Employees are able to purchase things like smartphones, tablets, televisions, smart watches and fitness trackers, as well as large and small domestic appliances. Products are available to purchase from popular brands, such as Apple, Nintendo and Samsung.
The payments can be made either through a salary sacrifice arrangement from gross pay or from a net pay arrangement.
The schemes are run across an agreed period of time, usually 12, 18 or even 36 months, with no interest fees, deposits or credit checks. Employees are able to join the scheme directly through a provider’s site, usually during the employer’s enrolment window.
Caboodle, an Access company, runs its net pay scheme in conjunction with Currys. Employees opt for a voucher for the value of their choice, up to a maximum amount set by the employer, and they receive the voucher to redeem at Currys on whatever tech they like that is available at the retailer. They then pay back the voucher through net salary deductions over the agreed period of time.
Through Blackhawk Network (BHN) Extras salary sacrifice Techscheme, employees can place a request for the amount they would like to spend at Currys or Ikea, and specify the products they intend to buy. Once their request has been approved, the employee will receive a redemption code with the requested value; this can then be used online, instore or via click and collect.
What are the cost implications?
The cost implications of the schemes are minimal for employers. If offered as a salary sacrifice benefit, employees will repay the cost from their salary interest-free over 12 or 18 instalments and benefit from national insurance savings, as well as paying no extra fees or interest.
Employers can set a maximum limit for the retail voucher.
Are there any tax or legal issues?
The home technology scheme is a benefit in kind (BIK) and can be reported via payrolling of taxable benefits or a P11D after the end of the tax year.
What are the current market trends or developments?
With the current pressures on the cost of living, providers have seen an increase in demand for the technology scheme. BHN Extras notes a 29% uplift year on year. Caboodle has seen an increase in the value of the voucher requested by employees: the average this year has been £851.50, which is a 15.9% increase on the previous year’s average value of £734.45.
Caboodle notes that October and March are the most common times for employers to run scheme windows and these are the most popular times for employees to use the scheme: 59% of the value of vouchers taken in 2022 were taken in October, while 40% of the vouchers value taken so far in 2023 were taken in October.
The scheme can offer support to employees who may be facing financial difficulty but have to replace a large appliance, such as a fridge freezer or a washing machine at short notice. Using the scheme can help them avoid taking out short-term or payday loans to afford such an unexpected cost.
BHN Extras employee research, published in March 2023, found that employees require benefits that help their money go further. Around three quarters (76%) of employees are looking for more ways to save money on what they buy, and more than half (51%) said that financial assistance with groceries was the top benefit their employers should be offering, followed by travel to work by car (37%), and technology (30%). The research found that the most popular technology items for employees are smartphones (24%), laptops (19%) and televisions (18%).
Who are the main providers?
Providers include: BHN Extras, Caboodle an Access company, Enjoy Benefits, Personal Group and Vivup.