Whatever your view about the principle of providing people with social security benefits if they are ill or unemployed, it is inadvisable to try living solely on what the State provides in such circumstances. The so-called "safety net" is lower than you may think it is.
After the recent U-turn on the Personal Independence Payments (PIP), the government has said there will be no more benefit cuts beyond those already planned, but that does not mean that you or your family could comfortably rely on State support to make ends meet during such times.
If you can't work because you are sick or disabled, you may be able to claim Statutory Sick Pay (SSP) or Employment and Support Allowance (ESA). SSP is paid at a fixed rate of £88.45 a week for the first 28 weeks of sickness if you work for an employer. Otherwise, you should claim ESA.
Personal Independence Payments are an additional benefit for people aged 16-64 with a long-term health condition or disability who need help with everyday tasks or getting around. The standard daily living component is £55.10 a week and this can increase by the addition of a standard mobility component of £21.80 a week.
If you become unemployed when you are 25 or over but have not reached your State pension age, you will receive a maximum of £73.10 a week Jobseekers Allowance while you are actively looking for work. The rules are different in Northern Ireland.
The full new State pension is £155.65 per week. Your National Insurance record is used to calculate your entitlement, and you will usually need 10 qualifying years to get any new State pension and normally 35 years to claim the full amount.
You might be able to claim Bereavement Allowance of up to £112.55 a week for up to 52 weeks if you are widowed between 45 and State pension age, together with a one-off £2,000 bereavement payment if you are under your State pension age when your husband, wife or civil partner died.
Whilst we cannot cover the full range of State benefits here, it should be sufficient to indicate that for most of you the amounts payable are inadequate to maintain the kind of standard of living that you would want to maintain. Get in touch with us to discuss a range of plans that could help bolster your financial defences.
The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.
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