Statutory sick pay – Britons labouring under a risky misconception

Worrying research published by Legal & General has shown that British employees could be relying too heavily on safety nets which are far less generous than they believe them to be. According to a survey carried out by the insurer, workers believe that they would be offered far more financial support should they fall ill than they would actually receive.

Legal & General’s Working Lives research showed that the average expected value of Statutory Sick Pay (SSP) was £143.20 a week – some 62% more than the real amount paid in the event of sickness. Less than a quarter of those surveyed were aware that SSP was in fact worth less than £100 a week.
The research shows that more than three quarters of employees surveyed thought that SSP was paid at a rate of £100 per week or more, while almost 15% thought SSP was paid at £150.01-£200 per week, and 15% said they believed it to be more than £200 per week. In fact, SSP is worth £88.45 per week.

The research involved a survey of 2,000 full time employees and 200 managing directors and HR managers from companies of various sizes. It was produced to raise awareness of the way in which long-term absence can impact on those involved – both by affecting the financial health of an individual and his or her family, and the way a business operates when coping with the absence of employees.

Employers pay SSP to qualifying employees when they have been off work for four or more days in a row (including non-working days) for a period of up to 28 weeks. While some employers choose to provide additional sick pay, not all do. It is always hard to consider worst case scenarios, and no one likes to think about what might happen should they be faced with a long term illness, but it pays for employees to be prepared and to fully understand what they might expect if they were to fall ill and find themselves unable to work.

There have been many innovations aimed at ensuring employees put in place their own provisions to support them if they have to be away from work due to illness. Ideas such as the government’s ‘Help to Save’ scheme, for example, is aimed at encouraging lower earners to save for the future so that they can contribute to a real savings pot which could be extremely helpful should that rainy day happen. But employers can help too.

Martin Noone, managing director at Legal & General Workplace Health and Protection, said: “It cannot be overestimated how much of an effect being off work with a long-term illness or injury can have on someone’s finances, so for less than a quarter of employees to know the actual value of Statutory Sick Pay is concerning. In many cases SSP will replace an employee’s salary if off work long-term so it is vital they acknowledge how this change would impact their lives should it sadly occur.

“It is a very real risk and our Working Lives research shows that considerable numbers of those surveyed had either themselves been off work long-term in the last 12 months or knew someone who had been.”

He continued: “Our Working Lives research highlights the need to raise awareness amongst employers and employees of this issue and the role that Group Income Protection can play in providing a solution. As was outlined further in [the Chancellor’s most recent] Budget, the government’s new ‘Help to Save’ scheme to support low income employees is certainly an interesting development, and supports the belief that government and industry should work closer together to provide solutions for employee income protection.”

To find out how IHC can help you to support your staff in the event of illness, contact Paul Roberts proberts@ihc.co.uk