Although the UK's major political parties have not been very forthcoming on their plans ahead of the upcoming general election, cuts to the welfare budget seem inevitable no matter which party or mix of parties assumes power after 7th May. This will place more onus on employers and individuals to provide for themselves.
According to Swiss Re's annual report on the UK group risk market, Group Watch 2015, the number of people covered, benefits insured and premiums all increased in 2014. That's very good news.
More worrying, though, is the decline in the number of in-force long-term disability income schemes just at the time when private cover will be needed more than ever before. Since 2006, the number of insured in-force schemes has fallen by 10%. I haven't seen any evidence to suggest that employers are doing more but deciding to self-insure rather than insure those risks.
A greater emphasis on the role disability income protection plays as part of a wider health and wellbeing strategy for employers can help the market grow but what else is needed? There is no evidence that individual disability income sales are increasing despite the best intentions of many very good people to drive change.
If the private sector does not step in, and further State withdrawal becomes a reality, might semi-compulsion through auto-enrolment, which has changed the shape of the pension market massively, be the only solution here too? I'd love to hear your views, as comments below.
Category: Funding longer lives: Health/medicine, Pension/retirement, Social contract