This week the ABI responded to the Work and Pensions Select Committee Inquiry into the Department for Work and Pensions preparedness for the changes to the world of work. In this blog Public Affairs Adviser, Emma Elson highlights key themes from this response, exploring the role of the insurance and long-term savings industry in supporting the development of Government policy as the landscape of work changes and the safety net our industry can provide to workforces and invdividuals as these changes and the impacts of the pandemic take effect.
The current crisis is accelerating changes in the workplace and labour market, with many more people than ever working flexibly and agilely. This is against a backdrop of an increasing number of self-employed and zero hours workers, with two thirds of jobs created since the financial crisis being atypical, but many of these roles have no formal links to their employer.
The insurance and long term savings sector, through its products, plays a critical role in helping employers to support their employees financially and to foster and protect mental and physical health too. Group income protection policies support employees through illness and injury, and employer pension contributions provide an income in retirement.
Protection insurers therefore provide a crucial safety net in the workplace, providing an income should an individual fall ill, but crucially help to create healthy and productive workplace
Protection insurers therefore provide a crucial safety net in the workplace, providing an income should an individual fall ill, but crucially help to create healthy and productive workplaces, through providing employee assistance programmes, early intervention services and other wellbeing resources, which can help to prevent ill health in the first instance.
The Government’s Good Work Plan seeks to help businesses to understand their legal responsibilities, through putting in place a day one written statement on employment rights. However, this statement does not include sick leave and pay, and in order to aid these efforts and help to prevent ill health related job losses, the ABI is working with Group Risk Development (GRiD) to develop an employer toolkit. This toolkit will set out steps an employer can take to support their workforce, through providing a sample best practice statement, and encouraging increased awareness amongst employees of their benefits and incomes through tools such as Percy the Protection Calculator. Percy is the ABI developed calculator which shows an individual the level of financial protection they have in place, should they fall ill and be unable to work. This calculator will also be particularly helpful for the ever-increasing number of self-employed workers, who would benefit from an individual income protection policy, but may not be aware of the benefits offered.
The current health, and resulting economic, crisis has demonstrated the lack of workplace protection that many people have in place, and the inadequacy of statutory sick pay. This moment should be used as a catalyst for change. Providing employees with more information and guidance regarding their workplace entitlements, allows them to more effectively plan financially, and make decisions that will ensure their financial wellbeing. We know that mental ill health is the main reason for workplace absences, and in the current climate, where many people are under unprecedented levels of stress, the mental health benefits of income protection policies are more relevant than ever. With no links to the workplace, many employees are missing out on these benefits.
Breaking the workplace link in the future will also affect retirement policy, which is intrinsically linked to the workplace through automatic enrolment, and as the number of self-employed workers increase and the traditional link to the workplace is eroded or evolved, some form of incentivisation must be put in place to encourage these new workers to save for a pension. Many of these workers will have seen their rainy-day savings badly affected by the current crisis, and will not have some form retirement saving.
Whilst there are challenges posed by the change to the world of work there are also huge advantages to the advances currently being made in creating flexible and agile workplaces that must not be lost, as there is potential for this change to bring benefits to many allowing them to fit their work around their life, juggling existing commitments. This benefits women in particular, who are likely to be impacted by the current economic shock more profoundly. We have seen in recent weeks the Government’s review of the Women in Finance Charter, and although there is still a way to go, we were proud to see the insurance sector leading the way, with the highest number of signatories by sector. It is vital that the lessons are learnt from COVID-19 are entrenched, which will aid to increase the diversity of the sector.
Just how our approach and attitudes to working structures, workplaces and our place within them will change in the wake of the pandemic remains to be seen, and may take many years to develop fully, but as the Government looks to rebuild our economy and productivity it’s clear that our sector has a key role to play in the work and wellbeing of the UK workforce.