City employees face losing perks as bosses cut costs

The capital's workers could be forced to give up company cars, free private healthcare and subsidised gym membership after research published today found that one in seven company directors is prepared to cull employee benefits to cut costs.

The survey of 200 City bosses found that 14% would not offer employees any rewards at all and nearly a quarter said they would dump company cars. More than 10% said they would get rid of leisure activities, such as gym membership, and private healthcare. Around 9% of the surveyed London directors even said they would drop pensions, childcare and holiday entitlements in the poll, which was carried out by fleet management firm Lloyds TSB Autolease.

Spokesman Claudia Rose said: "There is a limit to how far cutbacks can be made before it proves counter-productive. A properly rewarded and motivated workforce is essential for any business looking to manage its way out of a slump."

The latest threat to worker benefits comes after research found that half of UK businesses with final-salary pension schemes — which have a combined deficit of about £200 billion — expect to close them to workers in the next three years.