Hi hope someone can help. Here in South Africa we all take out PMI to avoid being in a state hospital for whatever the reason, be it emergency & accident or any other required treatment. Obviously cosmetic operations are excluded. It seems to me that for people in the UK, a PMI product is a luxury product for rich people. I was especially surprised to see that accident and emergency treatment is excluded generally. This being the main reason we have PMI... Am I right in my take on UK PMI? Who generally take out PMI then and why? thanks
Yes, you're essentially right. Basically, the UK's public health provision is very good, meaning it crowds out private provision (whether this is good or bad is left as an exercise to the reader). Private emergency care is simply infeasible and unlikely to match the scope and coverage of the public service. More routine healthcare can be covered by private insurance, and this gives you better quality services and shorter waits (and better food), but in general take-up is low. I don't see the value in joining my company's plan, for example.
nice! thanks More on the same topic, with regards to state provision. as I understand: Pensions are provided by the state. This is : 1) Not mandatory, you can contribute if you/your employer wants to. 2) Your pension entitlement is proportional to your total contributions when you retire. Welfare subsidy by the state: 1) Everyone has to contribute, your contributions proportional to your income. 2) If you earn below a certain figure, you qualify for state welfare. 3) If you are retired and your income is below a certain figure you also get. Sickness payment: 1) from employer to employee is statutory for the first 28 weeks. 2) this can be done in a private capacity by the employer 3) Or insurance can be taken out - Can the employer get this as part of national insurance? I am sure a lot of these points are wrong, just need some guidance... Thanks for any help!!!
Remember that the ST1 exam is not UK specific, so whilst it helps to have an understanding of how things work in the UK, the exam won't be testing you on this! In the UK, there is a basic state pension. How much you get on retirement depends on how many years you have made National Insurance contributions for, rather than your income, and is a flat rate. These contributions aren't voluntary! Lots of people also have employer provided pensions which are not (currently) compulsory and can be contributed to by the employee, employer or both. These can be DB (and therefore linked to salary) or, more usually these days, DC schemes. You can also set up your own individual pension, independent of an employer. In the UK, the government funds state benefits from National Insurance contributions, income tax etc. As you say, it's there to provide everyone with a minimum level of income. There are various types of benefits including low income, unemployment, disability and carers allowances (more information on some of these is covered in SA1). As mentioned above, everyone in the UK (provided they have contributed NI contributions for a minimum period) is entitled to receive the basic state pension. Those on low incomes in retirement can receive additional pension credits to top up this basic amount. Statutory sick pay is paid by an employer from the 4th day of sickness, up to 28 weeks. If by private capacity you mean the employer can take out an insurance policy to provide this benefit then you're right. It's paid by the employer, not by the State (and the State still take NI contributions and tax on the sick pay). Many employers will provide more than this minimum level though, often via IP policies. Hope this helps
Wow!, what a big help! Thanks!!! The NI contributions towards sick pay looks to be insurance against not being able to cover... cheers!
That's the idea, though NI does not have any sort of funding system - payments come in and out of general revenue/spending in the same way as any other tax or benefit.
