Research Uncovers Income Shortfall for People Diagnosed with a Critical Illness

In Industry News, Protection by PCH Staff

New research shows that over half of people diagnosed with a critical illness are having their worries compounded by additional financial pressures.

According to the research from insurer Royal London, 51% of people (around 3.5 million) diagnosed with a critical illness, such as cancer, heart attack or stroke, have also been hit financially, due to having to take time off work or facing unexpected bills.

The survey of 3,004 UK adults found that as well as the day-to-day living costs that need to be covered if someone is unable to work, the average additional cost of being ill or caring for someone who is ill amounts to £1,623.

Furthermore, two-thirds (65%) of those who faced a financial burden – because of their own critical illness or the critical illness of a loved one – managed to cover their outgoings using their existing day-to-day personal finances, while 31% dipped into their savings.

Transportation costs to the hospital, doctor or chemist were found to be the most common extra expense for people with a critical illness, cited by 67% of those surveyed and costing an average of £391.

A third (33%) of people said that higher utility expenses were a cause, with the costs averaging £675. While home alterations were the most costly expense averaging £1,764. However, home alterations were far less common, with just one in six people saying they needed to modify their homes.

Statutory Sick Pay Often Isn’t Enough

Employees who are too sick to work are entitled to Statutory Sick Pay (SSP), which equates to £89.35 per week at present and is paid for up to 28 weeks. To qualify, individuals must have been sick for more than four consecutive days. Income tax and national insurance needs to be paid on the payments.

However, Royal London says SSP payments are often not enough to cover the extra expenses incurred as a result of a person’s illness.

Worryingly, one in five (20%) people surveyed said they had no savings to fall back on in the event of them being diagnosed with a critical illness and being unable to work as a result.

Group head of protection strategy at Royal London, Debbie Kennedy, said: “Coping with a critical illness is a worrying time. Our research shows that although people expect the illness to have a financial impact they aren’t prepared, with a fifth not having any savings to fall back on.

“As increasing numbers are being diagnosed with a critical illness, we would urge people to try to get into the savings habit and consider speaking to a financial adviser about their options.”

The emotional burden of a critical illness is often too much to bare for many people. But add to this the additional expenses that are incurred and the situation quickly becomes unmanageable. Would you be able to cope financially and look after your family’s health/well-being if you were diagnosed with a critical illness?

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