- Leading insurer calls for the appointment of a new ‘savings minister’ and a fairer framework for setting the personal injury rate
Leading UK insurer and pension provider Zurich Insurance, has called for the appointment of a new ‘savings minister’ and a fairer framework for setting the personal injury rate, as it sets out its manifesto for insurance and savings ahead of the 2017 UK General Election.
The appointment of a new Savings Minister
Writing to the main political parties, it said a savings minister could ensure a “more coherent” approach to pension policy and help rebuild consumer confidence and trust in long-term savings.
Responsibility for savings policy currently sits across HM Treasury and the Department for Work and Pensions. But Zurich would like to see a new ministerial post spanning these departments, with responsibility for leading government-wide development, implementation and review of policy and legislative frameworks.
Tulsi Naidu, Zurich UK CEO said, “A savings minister would secure political representation for savers at the very top of government, coordinate savings policy across all departments and champion the needs of different consumer groups. It would demonstrate the Government is committed to supporting savers and give people the certainty they need to put money away for their futures.”
“We know that many Britons are not saving enough for retirement. Addressing this problem requires a more coherent approach to government policy-making and an end to piecemeal reform.
Measures to increase saving
Zurich outlined other measures to help increase saving among different consumer groups, including women, lower-earners and the self-employed. It called on parties to:
- Extend auto-enrolment to people of all ages and incomes by removing the upper and lower age limits and the lower earnings threshold of £10,000. Such reforms would also benefit women by helping to close the gender gap around employer contributions, with Zurich research finding that women are up to £47,000 worse off in retirement
- Implement a fairer and more sustainable flat rate of pension tax relief coupled with the removal of the lifetime allowance and a reduction in the annual allowance
- Help the self-employed to save more by enabling them to deduct pension contributions from profits, providing an effective tax break on national insurance
- Address long-term care funding by fixing the imbalance in the current system
Introducing incentives to improve take up of Group Income Protection
The insurer firmly believes that Income Protection cover, and the rehabilitation support provided within it, should be at the heart of any UK welfare solution. This cover not only protects the workforce from the financial shocks of long-term ill-health but also supports employers in helping people back to work sooner. This also results in significant financial benefits for the State through reduced welfare payments and increased tax revenue and helps to boost productivity.
The insurer is therefore encouraging the main parties to commit in their manifestos to working collaboratively with employers and insurers to tackle long-term sickness, for example by introducing a financial incentive for employers to improve take-up of Group Income Protection.
A fairer framework for the personal injury rate and tackling fraud
Zurich also highlighted the additional costs for insurance customers following the change to the way in which compensation for serious personal injuries is calculated, coupled with the latest increase in Insurance Premium Tax (IPT) from 10% to 12%. It urged the next Government not to drop essential reforms to whiplash claims and the Small Claims Track (SCT) within the Prisons and Courts Bill.
Tulsi added: “Urgent measures are needed to create a fairer framework for setting the Discount Rate, which is having a significant negative impact on insurance costs for customers at a time when they can least afford it. We encourage the main political parties to carry over the work to create a more appropriate framework for setting the Discount Rate which is fair for claimants, tax payers and premium payers and we would like to see a commitment to legislation in the next Parliament.
“Zurich has been leading the way in reducing fraudulent whiplash claims to protect honest customers who end up covering the cost through their motor insurance premiums. But we need Government action to help continue this momentum. The proposed reforms in the Prisons and Courts Bill were a welcome step in tackling fraudulent whiplash claims and we would encourage the next Government to reintroduce the Bill in the next Parliament”.
Boosting flood resilience
Other proposals include flood resilience remaining a strategic priority to ensure the resilience of buildings to flood damage in flood risk areas. The insurer would recommend a commitment to make the flood view of land clear when planning consent is provided to developers so this issue was considered by all parties prior to construction.
In its seven-point manifesto, Zurich urged the main political parties to: