Majority of Employees Overestimate the Value of SSP

In Business, Industry News by PCH Staff

Just 24% of employees in the UK know that Statutory Sick Pay (SSP) currently stands at less than £100 per week, a new survey suggests.

According to Legal & General’s Working Lives research, 76% of employees thought that SSP was at least £100 per week, if not more.

In fact, almost 15% believed SSP to be between £150.01 and £200 per week – which is almost double its actual value of £88.45 – while a further 15% thought it was over £200 per week; emphasising just how far apart people’s perceptions and reality actually are.

When informed about the actual level of SSP, 66% indicated that they thought it was “not that fair” or “not fair at all”. Over a quarter (26%) said that it was “fair” and 8% “very fair”.

Not all companies have company sick pay schemes

Statutory Sick Pay is paid by a person’s employer and can last for up to 28 weeks. Individuals can receive SSP if they have been ill for at least four days in a row; are classed as an employee and have done some work for their employer; and earn at least £112 (before tax).

If an employer has a company sick pay scheme in place, the amount an individual receives could be more than the standard minimum, but not all companies boast such schemes.

However, Legal & General’s research also showed that many employers were not fully aware of the true rate of SSP, with three out of five business owners saying they though it was £100 per week or more.

Martin Noone, managing director of Legal and General Workplace Health and Protection, said: “It cannot be overestimated how much of an effect being off work with a long-term illness or injury can have on someone’s finances, so for less than a quarter of employees to know the actual value of statutory sick pay is concerning.

“In many cases SSP will replace an employee’s salary if off work long-term so it is vital they acknowledge how this change would impact their lives should it sadly occur.

Group income protection awareness needs raising

Noone added that the Legal & General research highlighted that there was a need to raise awareness among both employers and employees about the important role group income protection plans can play in providing a solution.

He concluded by referencing the government’s new Help to Save scheme, which was outlined further in the Chancellor of the Exchequer’s recent budget, and is designed to support low-income employees and help them build up a rainy day fund.

It further “supports the belief that government and industry should work closer together to provide solutions for employee income protection,” said Noone.

A rainy day fund is typically enough money to cover an individual for three months should they lose their job, or something else goes wrong and their source of income is taken away.

The government has actually been in discussions with Legal & General over the insurance provider’s suggestion that a workplace income protection scheme – which pays out if a person falls ill – would be of benefit

Legal & General believes that such a scheme would build on auto-enrolment and enable individuals to boost their future retirement income.

The bottom line is that with SSP at just £88.45 per week, low-paid workers could definitely benefit from more support if they fall ill, which is why many are turning to protection insurance for peace of mind.

It is important for the industry to work closely with the government to raise awareness of this issue. If people fully understand what they will receive if they are off work sick they can then make an informed decision about purchasing protection cover, which we would recommend.

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