In time of need

Think tank: Fabian Society

Author(s): Andy Harrop; Howard Reed; Eloise Sacares

March 21, 2023

This report from UK think tank the Fabian Society looks at building employment insurance for all.

The UK’s system of income replacement – financial protection when people leave a job or stop working temporarily – is totally inadequate. According to the latest OECD figures for 2022, jobseeker’s allowance or the basic rate of universal credit replaces just 12 per cent of average earnings for a single adult. Even with means-tested support for rental costs the figure rises to only 34 per cent. Meanwhile statutory sick pay is worth just 16 per cent of average earnings. And it is getting worse: with the exception of maternity payments, the value of support has declined significantly as a percentage of earnings since 1990. As a result, people who stop working face financial hardship and anxiety, and employers fail to retain and recruit the workers they need. In this new report, Andrew Harrop, Howard Reed and Eloise Sacares make the case for a complete overhaul. Rather than fragmented reform on many fronts, they propose a comprehensive new system: British employment insurance.