The longer financial impact of illness

The start of the new year signals many different things – fresh resolutions, detoxing from rich food and alcohol and the start of the spring school term. It also brings a wave of coughs, colds, flu, norovirus and in the last few years, Covid. This year seems especially bad, with the head of the Royal College of Emergency Medicine describing the pressure on hospitals as “unacceptably awful”.

Fortunately, the majority of people will recover from their illness in just a few days without the need to visit hospital, but long-term illnesses and injuries are much more common than many people think. In our recent survey with 2,000 UK adults, we found more than a quarter (27%) have taken a month or more off work sometime during their career. Of these people, the average time they had been away from work was four and a half months, more than a third of a year.

This is a significant amount of time and is likely to impact income. Only around half of employers offer full pay for those who are on long-term sick leave. About a quarter of employees must rely on Statutory Sick Pay (SSP), which currently stands at £116.75 a week and is available for 28 weeks^[1]. The rest will receive Occupational Sick Pay, which is set at the discretion of the employer, which will be higher than SSP but lower than full salary.

For those who are self-employed, there is no safety net. No work means no pay. As of October 2024, there were almost 4.4 million self-employed workers in the UK and this figure is growing year on year^[2]. Even just a month off work can leave people struggling financially, let alone four or more.

Up to a third of UK adults have either no savings or less than £1,000 in a savings account. Two thirds of people believe they wouldn’t be able to last three months without an income without borrowing money^[3]. A prolonged period of sick leave will not only affect these people financially in the short-term as they try to find money for day-to-day bills, but the knock-on effects can also last for years.

SSP is the largest employment issue that people come to the Citizen’s Advice bureau for help with. Nearly 50 people a day contacted them about it in 2023/24, looking for advice on how to manage financial issues and where to turn to for support to maintain the basics of daily life^[4]. These inquiries are likely to be the tip of the iceberg, with many more people trying to cope on a reduced income.

Falling into debt doesn’t just affect people financially. It can affect them mentally, physically and emotionally. A study from the Royal College of Psychiatrists found that half of all adults with a debt problem also live with mental health issues^[5].

Being in debt is associated with shame and guilt and is one of the main reasons people don’t ask for help at the first sign of a problem. Too often this approach leads to the debt spiralling out of control and becoming a real crisis that takes much longer to recover from. It can damage their credit rating, which can seriously limit their future financial options.

Income protection has the power to help people, not just during a moment of crisis but also to shield them from the long-term impact of debt, which can be so harmful to their health and their happiness. Covering the essentials really can change lives.

www.cirencester-friendly.co.uk

^{[1] In sickness and in health: Why Statutory Sick Pay needs further reform - Citizens Advice}

^{[2] UK self-employment figures 2024 | Statista}

^{[3] UK Savings Statistics 2024 - Saving Facts and Stats Report | money.co.uk}

^{[4] In sickness and in health: Why Statutory Sick Pay needs further reform - Citizens Advice}

^{[5] Debt and mental health | Mental Health Foundation}