'The strength of the state scheme is its universal coverage, regardless of risk,' Michael Bett, chairman of the Social Security Advisory Committee (SSAC), said. He added: 'We see a continuing need for state benefits, both contributory and income-related.' Developments in private provision should be in addition to, not an alternative to, state schemes.
The comments come as a blow to those ministers and Conservative backbenchers who are looking for areas of the social security system from which the state can withdraw.
The SSAC's report concluded that 'state benefits must remain the major source of provision for contingencies such as unemployment, incapacity and disability. There is, at present, little scope for any substantial involvement by private sector insurance, except possibly in the area of insurance for mortgages when people become unemployed.'
It said many more people now benefited from occupational and personal pensions. For the low-paid, those with interrupted work patterns, women and vulnerable groups such as the disabled, 'adequate state provision in retirement is vital'.
The SSAC says those most at risk of unemployment due to their type of job, or family and health history would face the highest premiums. The long-term sick and disabled would be the least likely to obtain affordable private cover.
Private insurance might be able to cover mortgage payments for short-term unemployment or incapacity. For those on income-support, continuing help with housing costs will be needed, the committee said. If the private sector is to take the short-term load, 'the alternative form of insurance should be available and in place before any consideration is given to reducing state support for housing costs'.Reuse content