Unfortunately, if you have to take time off work due to an illness or other unfortunate circumstance, your financial commitments do not get put on hold. And while you may be entitled to receive statutory sick pay (SSP), is £89.35 a week for up to 28 weeks going to be enough for you and your family to live on?
The bottom line is that while SSP provides a crucial financial lifeline for people who find themselves unable to work because of an illness, it often isn’t enough to help most people make ends meet.
Indeed, new research released by Aviva shows that 12 million UK adults have suffered financial hardship as a result of unexpected ill health or death. Families with young children saw a “particularly damaging effect”, according to the Aviva research.
Almost a third (31%) of UK adults have had to take time off work, either temporarily or permanently, because of ill health, a cancer diagnosis or a death in the family. As a result, they have seen their income drop by nearly a quarter (24%) and their savings and investments fall by two-fifths (40%).
Worryingly, one in six (15%) people had to downsize, move in with family, rent or, in extreme cases, even became homeless following a health crisis.
Meanwhile, over a quarter (27%) of parents with dependent children said they have suffered a health emergency and nearly all (91%) said their finances were negatively impacted.
The Aviva Protecting Our Families report outlines how people who have experienced unexpected health events have noticeably poorer finances. The data shows that these people have a 24% lower monthly income than their counterparts who have not experienced a sudden health issue (£1,909 vs. £2,518). They also typically have 47% more debt, on average, (£9,692 vs. £6,573) and 40% less in savings and investments (£2,991 vs. £5,011).
To get by, UK adults who have experienced an unexpected health event or death in the family have had to resort to a number of different measures. Just under two in five (38%) had to apply for government benefits or other support, while 22% had to use savings. A further 16% said they had to resort to selling personal possessions.
However, there is some promising news to come from the Aviva study. Of those UK adults who experienced a loss of income due to ill health or a death in the family, over half (56%) managed to recover within a year. A further 18% recovered in longer than a year, while 13% said they still haven’t managed to recover. Moreover, these individuals don’t know how much longer it will take.
In fact, 12% or 1.9 million people who have experienced a health crisis said they don’t think they will ever recover from it financially, with women twice as likely to say this as men (16% vs. 8%).
Paul Brencher, Aviva UK Health and Protection Director, said: “Millions of people have seen their finances damaged by poor health: without any plans in place, a loss of income caused by ill-health can have a long-lasting effect on people’s finances. This can be particularly difficult for those with a family to support, who often have a range of financial obligations – such as mortgage payments and bills – and also the added concern of how they will provide for their children.”
We pay to insure and protect our homes, TVs, cars, even our pets, yet most people don’t protect their own health or income. Could you afford a 24% reduction in your income long term or see your savings reduce by 40% due to ill health/being off work.
Speak to PCG and we can discuss what options are available to protect your income and health and wellbeing.
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