Will the welfare state leave you short-changed?

By Steve Manning, founder of Manning and Company

Living in a country that has a welfare state, we can be lulled into a false sense of security.

Clearly there is a moral and ethical need for welfare but it is also open to abuse and this is obviously cause for concern.

What we perhaps do not realise is that the ‘middle class’ are more vulnerable than they might think. Why?

The wealthy have sufficient to weather most storms without having a great impact on their standard of living.

When the lower paid suffer similar unforeseen circumstances they will draw on state benefits, which will adequately replace their existing low income.

Those that are affected greatly are the vast majority of us ‘middle England’ folk who enjoy reasonable incomes of varying degrees, a standard of living to match, own a property with a mortgage and have taken on certain commitments.

Successive governments have given the impression that the state provides: health care, pensions, sickness benefits, unemployment benefits, disability benefits and more.

Apart from free health care, what we do not necessarily know is actually what the state will provide in the event of having to claim for disability or sickness; or for income in retirement. And besides, what is provided changes year by year, government by government - so it is very difficult to plan ahead with certainty.

We are starting to realise that we need to take responsibility for our wellbeing, financial and otherwise. Demographics suggest there will be more people retired than working – so the government cannot afford to maintain the ‘status quo’ anyway.  Even if it could, the impact on our present standard of living would be immense if we had to rely only on what the state has to offer.

I strongly suggest it’s time we take control, get advice and decide our future security while we have the opportunity.