You are here: Home - Insurance - News -

Workforce at risk despite sick pay rise

Written by:
Millions of workers would struggle to cope financially if they had to take time off because of illness or an accident, despite the rise in statutory sick pay (SSP).

The 85p increase – which comes into force this Saturday (6 April) – will see SSP go from £85.85 to £86.70 a week. With the average weekly expenditure for a family in the UK estimated to be £484, many households would not be able to cover the cost of their financial obligations without their usual salary.

Ian Smart of Bright Grey, a protection provider, said: “Without the income of a primary breadwinner many could see costs spiralling out of control, even when factoring in other benefits they might be eligible for – particularly when you consider that SSP is only available for 28 weeks.”

Despite this – and with the Government still making cuts to public spending – very few people have any form of safety net in place to ensure real protection in the event they had to stop working for a prolonged period of time.

Bright Grey found only 6% of people would consider buying insurance an immediate priority.

Peter Hamilton, head of retail at insurer Zurich, said: “Most people assume they will be covered by the State or their employer. But the reality is not enough are in good employee schemes.”

Only 1 in 10 workers have access to income protection, according to Zurich research.

Hamilton continued: “People need to understand that going from a good salary to relying on SSP would make a material difference to their lives.”


Ten top tips for buying and claiming on your income protection policy


1. Complete your IP application honestly providing all information about your medical history and pre-existing medical conditions – withholding information at this stage may result in a later claim being declined

2. On your application, provide an accurate description of your job role and the tasks involved. Also remember to update your insurer if you change jobs as this may affect your risk profile and monthly premiums.

3. Do you have other insurance policies that pay out as a result of incapacity or as a result of illness or injury – for example benefits from your employer. Some policies will take these into account when it comes to claim stage so make sure you consider them so you can determine the correct level of benefit you need and the premium you’ll pay.

4. It might sound obvious, but make sure you stick to your regular premium payments. Falling behind may result in your cover being stopped.

5. Be honest about your alcohol intake and smoking history – including nicotine patches, gum and other substitutes.

6. Read your policy thoroughly so that you know what conditions you are covered for and which are excluded.

7. It is always a good idea to take expert advice from a Financial Adviser. Protection policies can be complicated and an adviser will help you choose a product that best suits your needs.

8. Make sure you know if your IP premiums are guaranteed throughout the policy, linked to age or inflation, or reviewable so that you can budget accordingly.

9. Check what a potential insurer might offer in terms of ‘back to work’ support – for example counselling or physiotherapy might be available.

10. It is important that you understand your potential insurer’s definition of disability as there are many versions. These include an inability to do your usual job or any job (or occupation) or activities of daily living or daily working – such as dressing yourself or holding a pen. As a rule of thumb, own occupation policies are better as they will pay out if you are unable to do your usual job.




Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week