A Bout of Ill Health Could Leave Two-thirds of the UK Workforce in Financial Dire Straits

In Family, Individual, Industry News, Insurance by PCH Staff

Most UK employees are aware that should they fall ill and be unable to work, the financial consequences could be catastrophic. Nevertheless, many workers simply do not know how to change their situations and (wrongly) believe a modest amount of savings will be sufficient to see them through times of financial uncertainty.

These are just some of the key findings in a new report by health and wellbeing provider BHSF, entitled “A high wire with no safety net”.

The report highlights that by the time things like mortgages, council tax, car repayments and weekly shops are taken into account, any savings an individual has are unlikely to last more than a month or two at best, leaving them at risk of severe financial shock.

In fact, 37% of employees said they would actually be unable to pay their bills if they fell ill and were unable to work, while 28% said they would have to rely on credit cards to meet any unexpected financial obligations that cropped up.

This already dire situation is exacerbated by the fact that only one-third of the entire UK workforce has sick pay provisions above the statutory minimum in place. In other words, two-thirds of the working population would have to rely on Statutory Sick Pay (SSP) if they fell ill.

At present, SSP is paid at a rate of £89.35 per week if an individual is too ill to work. However, what many people don’t realise is that SSP is only paid by an employer for up to 28 weeks.

Public Sector Workers, in Particular, Worry About Financial Problems

For public sector workers, financial security in the event of illness is a big worry, with 74% saying they worry about being unable to pay their bills if they couldn’t work.

Moreover, 55% said this worry has resulted in them losing sleep and almost a third (29%) said worrying about financial problems has impacted their job performance.

Public sector workers also have fewer savings, at an average of £2,986, compared to the UK average of £3,762.

High levels of unsecured debt, such as credit cards, also add to the burden felt by UK workers. On average, individuals have around £1,910 in credit card debt.

One group that is in a particularly precarious situation is the 30-44 age group. Not only do they tend to have more than average unsecured debt, but they are also being stretched financially supporting elderly parents and children. The fact that most have no financial safety net in place should the worst happen means many could find themselves in dire circumstances if they were suddenly unable to work due to illness.

Speaking about the findings of the report, Brian Hall, managing director of BHSF Employee Benefits, said: “In reality, all it takes is one short bout of ill-health to leave two thirds of the entire UK workforce in serious financial straits which could take many years to recover from.”

He added: “Employers can do more to help employees become financially resilient by organising sick pay insurance schemes, which can provide a safety net at low cost to the employee and no cost to the employer. At present, the report suggests that just 30 percent of employees benefit from an employer-organised scheme.”

If you were ill and off work could you survive on £89.35 per week ?


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