This provides one monthly payment to a single-named person in the household and it’s all managed online. Its ambition is to simplify welfare, but some households can be waiting six to 12 weeks for support.
As highlighted by the Resolution Foundation, even when considered alongside policies designed to boost incomes, the ramp-up in welfare benefit shift to UC means that:
- 1.3m working families entitled to support in the tax credit system will no longer be entitled to any in-work support, leaving them £42 a week worse off on average;
- A further 1.2m families are set to receive the new benefit, but will be an average of £41 a week worse off;
- Only around 200,000 families who are no are longer entitled to UC at all will be overall better off following cuts to in-work support and boosts to income from the National Living Wage and income tax cuts.
Bereavement Support Payment
But that is still not everything.
A new Bereavement Support Payment system has also been introduced this year and although it’s been labelled as a ‘modernisation’ of the current system, the Childhood Bereavement Network estimates that more than nine in 10 widowed parents will be supported for a shorter period of time than they would under the previous system.
While the new benefit extends financial support to younger people without dependent children, older claimants and bereaved parents with dependents will now receive less overall.
Sadly, it’s also only for those who lose a spouse or civil partner, not cohabitees, despite the fact that 21 per cent of couples with children are not married, according to figures from the Office for National Statistics.
Consider your options
The upshot is this - welfare reform is reshaping the state benefits system and people reliant on the state need to consider all their options.
None of us want to think about the worst, but our own research shows there are an alarming number of people in the UK who are putting themselves at significant risk by failing to arrange cover for the unexpected.
Only a third have taken out life insurance and fewer than one in 10 have critical illness cover.
No matter what our personal circumstances, it’s vital for all of us to ensure we have an appropriate plan in place to protect our finances and provide the peace of mind that there’s a safety net in place.
This is an ideal opportunity to discuss all options with your clients.
For information on welfare entitlement and support, go to www.turn2us.org.uk and check out the material available from www.moneyadviceservice.org.uk
Johnny Timpson is protection specialist at Scottish Widows
