February 2015 Individual Welfare Accounts

The Treasury is considering a plan to replace contribution-based jobseeker's allowance (JSA) with individual welfare accounts proposed by the Policy Exchange think tank.

Under these proposals contribution-based JSA will be replaced with a new national unemployment scheme and system of personal welfare accounts (funded by a 1 per cent cut in the national insurance rate) under which every worker would contribute a small proportion of their weekly earnings into both a new nationwide unemployment insurance scheme and a personal pot called 'MyFund' to be used in times of unemployment, with unused funds paid out on retirement.

Other recommendations in the Policy Exchange report include


Limiting child benefit to four children per household, with progressively reduced weekly payments for each child after the first - this could generate up to £1bn in savings over the course of the next parliament and


Pensioners should be asked to ‘opt-in’ to receive their winter fuel payment - saving up to £400m a year


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