Millions of Brits could be left financially exposed by illness or injury because of a decline in the value of statutory sick pay (SSP) and contractual sick pay, Cirencester Friendly Society has warned.
An analysis by the income protection (IP) provider reveals that SSP has risen by just £25.14 since 2016 – from £383.28 to £408.42 per month – significantly trailing behind inflation and leaving the average worker with a shortfall of over £1,540 each month.
This compares with a monthly shortfall of £1,164 in 2016, if employees were unable to work due to illness or injury and had to rely on state benefits.
The pay gap is compounded by reduced contractual sick pay, which has fallen from an average of 15.7 weeks in 2016 to under 4.5 weeks this year.
Contractual sick pay has fallen from an average ofSource: Cirencester Friendly
15.7 weeks in 2016 to under 4.5 weeks now
At the same time, 25% of UK workers say they have no savings at all and this increases to nearly one in three (32%) women.
On average, Brits say their savings would last just nine weeks were they to stop working – down from over 13 weeks in 2016.
Despite the reduction in government and employer support and the drop in personal savings, only 17% of people have IP to provide them with continuing income if they are unable to work due to illness or injury.
David Macgregor, commercial director at Cirencester Friendly, warned that when faced with household bills, potential medical costs and either mortgage or rent, the average person’s savings would be exhausted in just nine weeks.
“We hope our findings will serve as a reminder for people to take out income protection to provide them with continuing income and peace of mind, if they are ill or injured and unable to work,” he added.