It has been revealed that the millions of people left abandoned on welfare are to expect the most radical overhaul of the UK’s benefits system for the past 100 years. Plans to review and revolutionise the existing system have been set out by our Work and Pensions Secretary, Ian Duncain Smith.
The focus when rebuilding the UK benefits system will be to see that work always pay and is clearly seen to pay by all. Far too many currently on benefits would actually end up worse off moving to a full or part-time job. The review intends to allow people to keep more of what they earn as they move into work whilst withdrawing benefits at a single, more reasonable rate as people start to earn more money.
It is quite likely we will see a major reform of the number and type of tax credits and benefits available and the way in which they are withdrawn when people move into work and develop.
There is much to consider but proposals suggest the current elements of income related benefits and tax credit systems could be combined. In addition the ‘out of work’ and ‘in work’ support system could be brought together to provide a far more streamlined system.
As always there are knock on effects with government reform and we can expect any of the company paid or personal income protection policies on the market which either deduct state benefits or are designed to top up state benefit will need to be reviewed and modified accordingly.
Let us wait and see but a simpler benefit system should result in a clearer and fairer welfare system whilst helping insurers to develop simpler insurance products. All in aid of making life easier for the consumer, watch this space.