Smokers may pay more into the NHS via their VAT on cigarettes, but smoking-related illness costs millions to treat every year. Kind of a false economy, no?
And if we are better off not saving, halving our income and claiming benefits than we would be by earning £50k gross per year, saving £10k of it and paying our way, then there is something horribly wrong with the system. With both of us earning we are contributing far more in tax and NI and this should be encouraged so that more funding is available for the welfare state. We are also significantly reducing the likelihood we will EVER need large-scale state support.