Brits Spend a Year on the Sick. How Do You Protect Your Earnings?

Nov 27, 2013   //   by Keith McDonald   //   Home and Living, Insurance  //  Comments Off on Brits Spend a Year on the Sick. How Do You Protect Your Earnings?

The average Brit misses almost a year and a half of their working life through illness, according to a new report. But over a third of workers receive no sick pay cover from their employer, leaving them vulnerable to a damaging loss of earnings. So, what can you do to protect yourself against illness or injury? Read on for more!

article_639A report from insurance company London Victoria (LV=) has shown that the average Brit spends 360 days on the sick. Across the British workforce, an average of six days per person per year is lost to sick days.

Around a tenth of all sick days are a result of stress and depression, with sufferers needing over two months (or 81 days) to recover on average. Workers with chronic back pain have taken an average of 57 days off work, while those reporting severe migraines have taken an average of 18 days.

Some have experienced a more severe plight, with around 650,000 people taking more than a year to recover from stress-related illnesses.

‘Lost’ Income

But the financial consequences of long-term illness or injury could be profoundly significant because employees are not automatically covered for sickness by their employer. Over half of employees (52%) admitted that they had no idea about their entitlements at their current workplace.

And LV’s report revealed that more than a third (36%) of people are not covered for sickness by their employer, which leaves them with no more than the standard statutory sick pay of £86.70 per week.

In monetary terms: a worker on the standard salary of £26,667 suffering from stress or depression would stand to lose a hefty £4,671 if they were receiving only statutory sick pay and took the average time (81 days) to return to work. Those with a serious back complaint could lose £3,215 if they took the average 57 days off without sickness cover.

IllnessAverage Time OffCost to Worker
Depression / Stress81 days£4,671
Back Pain57 days£3,215
Migraines18 days£849

 
But concerns about finances are forcing workers to risk their health and return to work early to minimise the impact. For those suffering from stress-related illnesses, the financial implications are likely to confound the problem, which makes it all the more difficult to make a full recovery. Around a quarter of those polled in LV’s report confessed that they didn’t know how they would manage to make ends meet without their regular income.

One option available to workers is sickness / income protection, which tends to start at around £10 per month and can cover part-time and self-employed workers in addition to standard contracted employees. These policies can also be flexible in how payouts are made, to fit around any standard employer’s cover in the event of an illness.

Unfortunately none of us are invincible and the reality is that some people will need to be off work for a large chunk of time. When we buy a car, a washing machine or even a phone we resign ourselves to the fact that at some point it might break down; however far too few of us have a back- up plan in place that would protect our income if we found ourselves unable to work.

Having a contingency plan, such as income protection, in place offers peace of mind that if our financial circumstances change due to illness we can focus on recovering.

Mark Jones, Head of Protection, LV=

Useful to Know

  • Statutory sick pay is worth £86.70 per week and is paid by an employer for up to 28 weeks. Workers qualify if they earn over £109 a week.
  • Statutory sick pay does not apply for the first three days of illness, unless a worker relapses within eight weeks from an illness or injury for which they previously received it.
  • Workers may receive more under contractual sick pay. This may be less than full pay (especially after a set number of days), but the amount cannot fall below the £86.70 of statutory sick pay.
  • All sick pay is treated as income for tax purposes.
  • Those who do not qualify for statutory sick pay, or who remain ill beyond their 28-week entitlement, may qualify for Employment and Support Allowance (ESA). Find out more.

 

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