Crisis lessons – spotlight falls on social security net

Covid-19 has put the social security system under the spotlight as additional measures were brought in to help those affected. But they may not last, so how would you fare long term if you need a safety net?

The Covid-19 pandemic has highlighted many aspects of life which had previously gone unnoticed or ignored and found the holes.

The full extent to which supply chains are global is an obvious example. Our reliance on internet connections and their surprising robustness when the world turned to Netflix and Zoom is another. Of crucial importance to many people, that governments around the world latched onto quickly, was the need to bolster the poor protection provided by their social security safety nets.

In the UK, measures taken include:

Some of the changes made by the government may endure – it will be hard to reinstate the former Universal Credit standard allowance, for example – but others are too costly or disruptive to maintain.

Whether or not you have benefited from any of the Covid-19 measures, it is worth considering how you and your family finances would have fared if instead of a pandemic, you faced the more common risks of losing your job or even dying. There would be no enhanced state safety net in those circumstances. The lesson, like some of those other Covid-19 insights, is one often ignored: you need to have your own protection in place, be it through insurance and/or a sufficient rainy-day fund.

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