Salary sacrifice car schemes have been an available employee benefit for around ten years now, and while they have enjoyed steady growth in that time, the general perception is that interest and expectations have boosted their popularity significantly in the last two years. And now we have the figures to prove it, to the point where your business may be missing out in more ways than one if you don’t offer your employees what is becoming a staple incentive.

The huge recent growth in salary sacrifice car schemes started at the tail end of 2023. The BVRLA’s Leasing Outlook report at the time claimed a 68% year-on-year increase in salary sacrifice take-up in the third quarter of 2023, which in itself was a 12% increase on the previous quarter (Quarter two 2023). At the time it was felt that salary sacrifice schemes were starting to see the benefits of people who had previously admired the concept of the scheme, but had been tied in to historic lease agreements, and these were now coming to an end. This offered some industry confidence that increased interest in salary sacrifice car schemes would continue, and while that has been the case, it can be attributed to more impactful causes.

Salary sacrifice schemes a main reason why people are switching to electric driving

By July 2024, the BVRLA’s report on the leasing industry was showing an even rosier picture in terms of salary sacrifice. By this time it was claimed that salary sacrifice was one of the main reasons why people were switching to driving electric vehicles (EVs). The report claimed that 80,000 UK motorists were now driving an EV through a salary sacrifice car scheme, which was a 63% year-on-year increase. 32% of these drivers claimed that financial considerations (i.e. the incentives offered through a salary sacrifice car scheme) were their main motivating factor for making the switch to EVs, with fuel costs and environmental considerations the other main factors. 94% of those EV motorists were expected to stick with their EV, while a further 64% of respondents were planning to switch to a salary sacrifice car scheme within the next four years.

Such an encouraging uplift in interest was also being stimulated by helpful BIK tax rates, which heavily incentivised EV driving. The Government’s Autumn Statement in 2024 maintained this status and continued to support salary sacrifice car schemes in terms of low-emission vehicles qualifying sign-ups to take their salary sacrifice on their gross salary, and hence benefitting from both national insurance and income tax reductions. The Autumn Statement is credited for a further uplift in interest in salary sacrifice car schemes.

Salary sacrifice leasing broker, the Electric Car Scheme, issued figures in March 2025 which reported a 21% increase in businesses enquiring about salary sacrifice car schemes, in the months following the Autumn Statement. It also reported a 34% increase in businesses subsequently signing up. And perhaps the most telling statistic is that 30% of employees now expected their employer to offer them some sort of incentive towards sustainable commuting. Only 10% of employees held this expectation 12 months earlier in 2023.

Salary sacrifice car schemes an expectation for employees in 2025

This illustrates how factors such as the rise in EV popularity and the cost of living crisis have combined to support the rise of salary sacrifice schemes, to the extent where such employee benefits are now a concrete expectation. Businesses can now legitimately position salary sacrifice front and centre as a recruitment tool to attract and retain the very best employees, and run the risk of losing out on top candidates and committed employees if they don’t offer such a scheme within their renumeration package.

So contact our team at Pink Salary Exchange and we can talk to you about the employee and employer benefits of salary sacrifice car schemes and how the scheme works. Then if you sign-up today you can help to meet the rising expectations of your employees.