How far can you stretch £95.85?
Updated: Jan 18, 2021
Fortunately for most of us £95.85 is a figure you never need worry about. However, for the vast majority of employed people in the UK this amount is what you may be expected to survive on if you were unable to work due to ill health.
£95.85 per week is the Statutory Sick Pay amount (also known as SSP), this is the minimum amount all employers must pay you for up to 28 weeks if you are too ill to work and meet the criteria. Thankfully for most of us a few days off due to a cough or cold won’t trigger off alarm bells with your employer but what if you were taken ill with something far more serious?
Let's put the £95.85 into context for an average family in the UK. The Office for National Statistics in its 2019 Family Spending report found that the average household expenditure was an incredible £585.60 per week. Broken down the ONS found that £79.40 was allocated to housing, fuel and power alone (not including mortgage interest or council tax), this leaves very little money for essentials like food and transport.
The ONS also reported that in July 2020 just over 2.6 million people were claiming “Out of Work” benefits, these are UK residents that are claiming ESA (Employment Support Allowance, previously known as Disability Living Allowance) and other incapacity benefits like income support and pension credits.
The sad reality is that the latest ABI (Association of British Insurers) report showed that in 2019 whilst relatively few people have Income Protection insurance a total of £669k was still paid out last year alone with the average claim resulting in a payout of £17,700 per claim.
These reports suggest that whilst there is a clear need for income protection in the UK very few people hold an insurance policy to cover long term illness. Whilst it’s great that life insurance and critical illness cover are often the first policy people think about arranging, it’s actually income protection that is far more likely to be claimed based on the number of people reported to be claiming ESA.
A good way to work out how much cover you may need and to broadly calculate the impact to your family finances in the event of long term ill health is the ABI’s Percy calulator. We’ve added a link to it below, why not take a look.
In the meantime Life Cover Direct are happy to help and answer any questions you might have. Just drop us a line or send us an email.