Abbey at Work has withdrawn from the voluntary benefits market on commercial grounds, leaving up to 200 clients without a long-term provider. It is no longer promoting corporate schemes and has stopped accepting new business.
It has also written to clients asking them to remove details of Abbey at Work’s voluntary benefits scheme from their communications materials. Employees with access to existing corporate schemes will be able to continue to take advantage of Abbey at Work offers until 1 April this year.
The withdrawal follows the takeover of Abbey by Spanish bank Santander and a subsequent review of the part of the business responsible for promoting financial products in the workplace. Stuart Bailey, head of Abbey at Work, said: "We found that the cost of promoting financial services in the workplace wasn’t justified by the amount of business coming in. So on commercial grounds we decided [to withdraw from the voluntary benefits market]."
He added that new regulations relating to account opening and money laundering had also pushed up the cost of providing voluntary benefits to clients. Other voluntary benefits providers have said that they are not surprised at Abbey’s withdrawal.
Martin Harris, head of customer management at Bringme, said: "The employee benefits market has evolved considerably, and has become very competitive; voluntary benefits is a particularly hard area to make money in." The Caudwell Group is one organisation that offered an Abbey-run scheme to staff.
Clare Walker, Caudwell’s compensation and benefits manager, said the change was unlikely to have a great impact on its benefits package because a relatively low number of staff had chosen to take advantage of the voluntary benefits scheme. She added that the Caudwell Group doesn’t intend to introduce any additional benefits to replace the scheme because the company is now up for sale.
A small number of Abbey at Work employees have been made redundant as a result of its move away from voluntary benefits. Bailey was unable to confirm the exact number of redundancies but said those affected are all sales staff.