State benefit cuts mean individuals must take more responsibility to protect themselves, providers and advisers have warned.
Their comments came as the cross-party Work and Pensions Committee launched an inquiry into how the government's proposed benefit cap will affect British households.
Tom Conner, director at pensions, investments and insurance company Drewberry, commented: "It's no secret that public finances have been under pressure for a long time now and that trend looks set to continue. In this environment individuals need to take private measures rather than solely relying on a reducing welfare state.
"The most important private protection to put in place is income protection. Historically only half of people 'pass' work capability assessments to qualify for state incapacity support in the form of the Employment & Support Allowance (ESA), which demonstrates that state support should only be a secondary line of defense at best."
Andy Simmons, senior income protection specialist at VitalityLife, said: "We are continuing to see the gradual transfer of risk from the public sector and large corporations to individuals, and the ongoing reductions in state benefits are further evidence of this trend.
"The combination of both factors highlights the importance of self-provision. Very few people would comfortably survive on state benefits alone, let alone pay the bills and maintain their standard of living.
"Income protection can be vital for those who unexpectedly find they cannot work for a substantial period of time due to ill health."
The Rt Hon Frank Field MP, chairman of the Work and Pensions Committee's (WPC), said it was important that any benefits regime supported and encouraged people to get back to work, rather than leaving them on state benefits.
He said: "Quite often when the government reduces a benefit, the justification given is that it will incentivise work, and obviously encouraging and supporting the strivers is a laudable goal. People can escape the benefit cap if they move into work.
"The government must be challenged to put much more resources in helping families whose benefits are going to be in cut in this way to know there is an exit and one which they might be able to grasp soon."
Speaking as the report was launched, Karen Buck MP, member of the committee, said: "The government’s argument for the benefit cap is that it will incentivise work.
"Set against this is the fact that many of those affected have been found to be incapable of work. Neither does the cap reflect the reality of housing, even of homeless households.
"The committee will want to look at the actual impact the cap is having, who is affected and how it interacts with other factors, from health to housing."
What the inquiry will consider:
- The Work and Pensions Committee's inquiry into the benefit cap will explore how it affects British households.
- The benefit cap - which limits the income households receive in certain benefits - was reduced from £26,000 a year to £20,000 a year outside London and £23,000 within London in November 2016.
- The government estimates that, in the absence of any 'behavioural changes' from claimants, 88,000 households are affected by the new cap, compared with around 20,000 under the previous policy.
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