Statutory Sick Pay (or SSP) is flagging behind inflation, meaning millions of Brits would be left financially exposed if they were to get hit by an illness or injury, new research shows.
According to the analysis by Cirencester Friendly Society, SSP has risen by just £25.14 since 2016 – from £383.28 to £408.42 per month. This is significantly less than inflation, leaving the average worker with a shortfall of over £1,540 each month. For comparison, in 2016, the monthly shortfall, if an employee was unable to work due to illness or injury and had to rely on state benefits, was £1,164.
The pay gap is exacerbated by reduced contractual sick pay, which has declined from an average of 15.7 weeks in 2016 to under 4.5 weeks this year.
To make the situation even worse and more worrying for workers is the fact that 25% admitted to having no savings at all. In women, this figure rises to one in three (32%), highlighting that a significant proportion of the population would be unable to make ends meet if they were off work without any pay.
In fact, Brits say their savings would last, on average, just nine weeks if they were to stop working. This figure is down from over 13 weeks in 2016.
Most Brit’s savings would last just 9 weeks
Perhaps of most concern is that despite the fall in government and employer support when an employee falls ill, and the apparent lack of personal savings, only 17% of people polled said they had Income Protection, a product designed to provide a financial safety net in the event of an individual becoming unable to work due to illness or injury.
Speaking about the findings of the research, David Macgregor, commercial director at Cirencester Friendly Society, urged employees to consider what they would do if faced with a situation that left them without a salary for a period of time.
“We hope our findings will serve as a reminder for people to take out income protection to provide them with continuing income and peace of mind, if they are ill or injured and unable to work,” he said.
While there is some protection in place to help individuals who are not receiving a salary because of an illness or injury, the reality is that added financial pressure and stress is not the ideal combination when someone is trying to recover. This results in people taking more time off than they probably would have, which compounds the whole issue.
That’s why it’s so important for people – especially those with dependents – to put safeguards in place to protect against whatever the future holds.
With a quarter of us having no savings to fall back on should we be unable to work due to illness or injury, an income protection plan can offer that security and peace of mind at the time it is needed most.
Rebecca joined Premier Choice Healthcare in February 2019 as a dedicated consumer account manager and looks after the needs of our individual clients. Prior to this, she worked for AXA PPP Healthcare for eleven years where she was a SME Account Manager working with a portfolio of key intermediaries across the UK.