Two in three workers are at risk of financial shock if they fall ill, according to a nationwide report published by health and wellbeing provider BHSF.
The report titled ‘A high wire with no safety net’, details the perilous state of many employees finances, with many being unable to pay their household bills for more than six to eight weeks.
Employees in Leeds are the most worried in England, alongside Birmingham and Bristol, with 77 percent of those surveyed admitting that they are concerned about their financial security in the event of illness. Worse still, 39 percent admit that financial stress is affecting workplace productivity – and despite this, 40 percent have no sick pay provision.
The dire situation is exacerbated by the lack of savings and high levels of unsecured debt. In fact, employees in Leeds have higher than average debt, £2,090, compared with UK average £1,910.
Brian Hall, Managing Director of BHSF Employee Benefits, commented: “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 and many will be forced back to work when they are not fit to return.”
The report also demonstrates that employees are overly-optimistic about their ability to withstand financial shock, with employees in Leeds under the pretence that they could last for as long as four months.
"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."
“It is very worrying that employees appear to be in a state of denial over how precarious their financial situation is in reality,” says Mr Hall. “All it takes is one short bout of ill-health to leave two thirds of the entire UK workforce in serious financial straits which could take many years to recover from. Average savings will last for little more than six to eight weeks, if that.”
It is those that are most relied upon that are most at risk – the UK’s ‘sandwich generation’. The 30-44 age group was found to be the least resilient when it came to financial problems and more than average unsecured debt. In fact, debt levels have increased for this group over the last five years, meaning that this age group, while supporting elderly parents and children, are being stretched to breaking point with no safety net should they be unable to work due to ill health.
Mr Hall says 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. At present, the report suggests that just 30 percent of employees in the UK benefit from an employer-organised scheme.
“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.”
BHSF’s beginnings lay in the creation of a momentum to open up good quality healthcare to ordinary working people in the 1870’s. Today BHSF is highlighting the modern need for financial security, a safety net for those who fall ill.
The ‘A high wire with no safety net’ report is available to download at: www.bhsf.co.uk/reports/sickleave
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