On Monday I wrote about the proposals to provide for social care by increasing the National Insurance rate. I thought I’d sketch out a proposal of my own here to contribute to the debate. My proposal is as follows.
First, scrap the current National Insurance system which in reality acts as another form of compulsory taxation. This would mean an increase to the base rate of taxation and possibly the introduction of a new lower band to cover the revenue currently received through NI. Employer’s taxation would also need to be adjusted.
Secondly, I’d introduce a new national life insurance scheme. This would enable people to contribute throughout their career into a pot that would support a number of life circumstances that might arise. These might include the following
- The need to provide for social care in later life
- Pension provisions
- Student fees for children
- Contribution to a deposit for a child’s first home
- Furlough from work due to an economic or heath crisis
- Funeral costs
Unlike the current National Insurance system, participants would have the option to opt out and access alternative private insurance suppliers. The only prescriptive element would be a legal requirement to have made some provision for future needs.
Additionally, I’d also make it possibly for such insurance policies to be included in inheritance so that children can continuing contributing to the same pot.