The auto enrolment system should be extended to include income protection (IP) according to Prosperis head of employee benefit consulting Steve Ellis, and he intends to ensure his MP understands the necessity for the change.
Last week, government committed to supporting the creation of a consensus statement to improve employers’ awareness of the link between good work and good health, and to improving awareness among employers and self-employed people about the benefits protection policies can provide.
But Ellis told Health & Protection that government needs to go further and he plans to put forward the idea of auto enrolment for IP when he meets with Conservative MP Alec Shelbrooke, who has invited him to Parliament to discuss his views on the industry.
UK organisations have been auto enrolling workers into pension schemes for the last decade with the project largely considered a success due to low opt-out rates and increased savings.
However Ellis believes it should go further.
“I would say the government needs to be bolder and auto enrol workers with employers effectively paying a quarter of a per cent of salary role into a basic income protection scheme,” he said.
Ellis added this was needed as he contends incentives for employers to provide such cover will never work.
“You’ve got to almost force them into creating this pot of money,” he continued.
While Ellis lauded government’s efforts to auto enrol the population into pension schemes, he added this is meaningless if people find themselves out of work in the run up to retirement.
“An income protection scheme is a vehicle to allow people to help fund their retirement. If you have no income pre-retirement, you’re not saving into a pension and then you will have nothing when you come to retire,” he added.
