Realistic reductions in the cost of welfare will not come from further cuts but from lessening the reliance on the state, Helen White, head of protection at the Association of British Insurers, has said.
Writing on the ABI blog, she said: “While politicians consider how to further curb welfare spending without neglecting society’s most vulnerable, perhaps they should be asking whether cuts are a realistic, or even the most effective, means to that end.”
Realistic reductions in the cost of welfare will not come from further cuts, but from lessening the reliance on the state, she added.
The ideal, she said, would be to find a way to ease welfare costs while ensuring that individuals who are unexpectedly forced to leave work have more financial support than they get under the state.
“Politicians should be clearer about how much the state will support people and their families. They should encourage them to think what they would do at times of hardship, what they would get from the state, whether that is sufficient to pay their mortgage and household bills and whether they could support their families.”
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Robert Harvey, protection adviser with East Sussex-based Drewberry, said: “Most people have a misconception that if they are ill and unable to work, the state will provide them with sufficient support to maintain their standard of living.
“But few families have enough savings behind them to provide financial support, with approximately 60 per cent unable to survive for more than three months relying on savings alone.”
