Overview

• The IFS estimates a 12‑month unemployment insurance would cover entire out‑of‑work spells for about 53% of job losers and save around £2bn a year.
• A six‑month limit would raise the long‑run saving to roughly £3bn because most contributory spending currently goes to claims lasting at least a year.
• Under the proposal, payments would be set at £140.55 a week at the ESA level rather than the £92.05 now paid to jobseekers, but entitlement would be time‑limited.
• Charities including the Nuffield Foundation warn that existing long‑term claimants with health conditions need transitional protections to prevent loss of indefinite support.
• The DWP consultation is open, ministers frame the goal as stronger income protection for contributors, and the IFS says savings would arrive more slowly if changes apply only to new claims as the OBR assesses fiscal impacts before Budget decisions.