Low financially resilient households

Swiss Re was delighted to host the launch today of Building Resilient Households' Low financially resilient households report, published by the Chartered Insurance Institute .

Swiss Re was a founder member of the Building Resilient Households Group seven years ago and is delighted to have been one of the funders of its latest report.

Its key recommendation is the establishment of an independent Commission on Household Financial Security with Terms of Reference along the following lines:

? To assess the current – and likely future – state of household financial security in the UK

? To make recommendations about how necessary improvements in financial security can be brought about

? In doing so, to consult widely and to produce a final report within two years

The number of people lacking financial resilience continues to grow with the latest data from the FCA showing this at 12.9 million adults – an increase of one million over just two years.

The report highlights and develops a number of themes

·?????? Promoting savings

·?????? Promoting employment-related benefits and services

·?????? Creating more fairness in key services

·?????? Better financial education

·?????? Improving access to help for people in financial difficulty –including affordable credit

·?????? Tackling low pay

·?????? Reforms to State benefits and Housing policy

It's a very wide-ranging report and there are many causes of financial shocks, leading to lower financial resilience, including loss of earnings through sickness. The report shows how that just 28% of UK employers pay more than the minimum Statutory Sick Pay.

The proposal that employers should include details of employee benefits such as sickness and maternity pay in their annual reports is an interesting one.? We know that some employers provide different levels of sick pay and a breakdown of how different groups of employees are treated would be essential. The report makes the very good point that transparency is important for shareholders, employees and the wider public and will help to drive good practice.?

We would also like to see so-called "day one" statements of sick pay statements, which should be given to new workers, extended to all workers and updated whenever a change takes place. One example would be a change to the period over which they are payable, a trend we've seen in the insurance sector with a number of employers limiting sick pay to a maximum five years. ?

We strongly support the proposal devised by BRHG which would enable renters in receipt of Universal Credit to benefit from any Individual Income Protection policy they may have. The current treatment between renters and mortgage holders is inequitable and, at this very difficult time when so many people are financially stretched, this would help them keep a roof over their head and would help to reduce some of the pressures faced by local authorities in managing their budgets. As the report states, in most cases, Universal Credit doesn’t cover their full rent.?