When it comes to taking time off sick, Brits are a hardy lot.
A study by Mitrefinch earlier this month found that throughout 2019, UK-based workers took off an average of 4.4 days due to ill health last year, the fourth-lowest in Europe.
But for everyone taking off a day or two due to a heavy cold, there are plenty of other workers facing more substantial periods off work as a result of developing much more serious issues.
And worryingly, it seems that the sick pay safety net is not quite as secure as it used to be.
Statutory Sick Pay
If you’re unwell and unable to work, then some security comes in the form of Statutory Sick Pay (SSP).
In order to claim it, you need to have been off sick for at least four consecutive days, including non-working days.
You receive it for up to 28 weeks, and it’s paid in much the same way as your normal salary ‒ your employer pays it, with tax and National Insurance deducted as usual.
Currently, SSP is worth £94.25 per week, which works out at around £408.25 per week.
It’s risen too over the last few years ‒ since 2016 the amount that recipients can get in SSP has grown by £25.14.
The trouble is that that rate of growth hasn’t come close to matching inflation over that period, effectively leaving people worse off.
In fact, it hasn’t kept up with the growth in typical wages either.
According to calculations by Cirencester Friendly Society, over the past three years, the average gap between earnings and SSP has increased by more than £375 a month, a really significant rise.
Clearly, relying on SSP to make ends meet if you get sick is a risky step.
Protect your income if you become unable to work
Sick pay from your employer
Thankfully, many employers are more generous, paying above the minimum set out by SSP.
This will vary depending on the employer, but it will typically be your full salary for a set number of days, followed by a percentage of your salary for a set period, before eventually dropping down to the SSP.
This ‘contractual’ sick pay will be set out in your contract with your employer, so if you aren’t sure what cover you have, it’s well worth checking the small print of your contract.
Worryingly, this is another area where things have got worse over the last three years. Cirencester’s data found that back in 2016, contractual sick pay provided those who fall ill with their full salary for a period of 15.7 weeks on average.
But that has crashed to just 4.5 weeks today.
So while some will benefit from particularly understanding and generous employers, who maintain their salaries for a significant period after they fall ill, increasing numbers of workers face a much shorter period of enjoying contractual sick pay before dropping onto SSP and the difficulties that may bring.
Protecting yourself
It’s obviously a good thing that there is at least some protection in place to help people continue paying the bills if they are too unwell to work.
But let’s be honest, it’s not going to be easy trying to recover while also worrying about money, which is likely to happen unless you have a seriously generous employer.
As a result, it’s important that you put some sort of plan in place yourself to ensure that your finances don’t take a turn for the worse just as your health does.
So what are your options?
Protect your income if you become unable to work
Building up a savings safety net
The most straightforward answer is to have a decent savings safety net in place that you can turn to should you be unable to work due to poor health.
Many financial industry experts suggest having savings worth around three months’ salary in place as a back-up plan, which sounds about right to me.
The trouble is that building up a pot that large takes time ‒ especially in the current climate of tiny interest rates on offer ‒ and relies on people having enough disposable income to devote some of that cash towards building a savings pot.
And an awful lot of people in the UK don’t have any savings at all.
A study by Nationwide last year suggested that around a quarter of adults don’t have anything put aside for a rainy day, the equivalent of around 12 million people.
What’s more, it found that even of those with some savings, almost half (48%) don’t add to that figure on a monthly basis.
Protecting your income
An alternative option is to take out an income protection insurance policy. As the name suggests, it’s a form of insurance that will provide you with an income for a set period of time if you cannot work.
It comes in three forms ‒ accident and sickness only, unemployment only, and a comprehensive version that covers you in case of unemployment, accident or sickness.
With a policy like this, you protect a portion of your income ‒ perhaps up to 70% ‒ and then should you be off work sick for a set period, the policy will pay you that insured amount for the period of your cover.
You can go for a short-term policy, which pays out for up to 12 months, or long-term income protection, which pays out for as long as it takes for you to get better and return to work, or simply retire.
Obviously, the latter is likely to mean much higher premiums than going for a short-term policy, but it all comes down to what you need and what you feel you can afford.
You’ll have to decide for yourself whether you’d rather commit that £50 a month towards an insurance policy that you will hopefully never have to claim on, or to a savings account that will always be there should you need it.
But no matter what, you do need to have some sort of contingency plan to ensure that if your health suffers, your finances don't as well.
For more, check out our guide on how to insure your income.
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