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Employee Benefits News

Latest News
27 Dec 2017

Lack of adequate sick pay leaves UK workers at risk of ´financial shock´

Two in three UK employees have no sick pay provision beyond the statutory minimum, and many would be unable to pay household bills for more than six to eight weeks in the event of ill-health.

That´s according to research from health insurance provider BHSF, which said that employees are at risk of a ‘severe financial shock´ if they fall ill and are unable to work.

Over two thirds (37%) admitted that they could not pay their bills in the event of ill-health and 28% said they would resort to using credit cards for unexpected bills.

Last year, research by the Money Advice Service revealed that 40% of working-age people in the UK have less than £100 in savings available to them at any time.

Brian Hall, managing director of BHSF Employee Benefits, said: “The combination of a lack of savings allied to zero sick pay provision, other than the statutory minimum of £89.35 per week, leaves many employees walking a high wire with no safety net. By the time mortgages, car repayments, Council Tax and four-weekly shops are taken into account, the vast majority of the UK´s workforce will find themselves in dire financial straits in a very short period of time, many will be forced back to work when they are not fit to return.”

The survey also suggests that employees are overly optimistic about their ability to withstand financial shock, with many believing they could last for up to six months. This is despite high levels of unsecured debt, such as credit cards, averaging around £1,910, and inadequate savings, BHSF noted.

Those most at risk are the so-called ‘sandwich generation´ — aged 30-44 — who often have children and elderly parents to support, and are the least resilient when it comes to financial problems.

The report highlighted the mental impact of financial stress, with half of the UK´s working population admitting that they have lost sleep due to financial worries, and a third admitting that financial stress is impacting their job performance.

Hall said that employers can do more to help employees become more financially resilient by organising sick pay insurance schemes which can provide a safety net at low cost to the employee and no cost the employer.

“There are low cost insurance schemes available that can provide a safety net, but it needs employers to act as the catalyst in the workplace. If employees truly are the most valuable asset, it is incumbent upon employers to be brave and to help educate their workforce about financial issues such as sick pay. All-too-often the subject is swept under the carpet or not adequately addressed with a negative impact on employee wellbeing and mental health.”

Copyright © M2 Bespoke 2017

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