The brutal factsEvery 15 minutes another UK family is homeless and the majority of government cuts are still to come
One in four workers have no financial safety net for long-term sick leave
One in 10 of us will face a period of sickness absence of more than 6 months during our working lives
51% of employees say, if they were off sick, their employer would pay full salary for at least 3-6 months. But when this stops only 35% would be able to rely on their savings
Almost 1 in 4 (23%) admitted having no financial safety net in the event they would be unable to work long-term
49% had less than £2,000 in savings etc to support themselves and their family – the equivalent of just one month’s average salary.
The majority of UK households are unprepared for unforeseen circumstances, with an average of just 19 days worth of savings etc. should an individual be unable to work
£86.70 per week standard sick pay (SSP) came into force on 6 April 2013. Many households would still struggle as the average UK has an average weekly expenditure of £484. This would be unaffordable should primary income be lost, particularly when SSP is only available for 28 weeks.The financial implications of losing out on a regular income can be dire. With the UK government still making cuts to public spending, it is essential for people to think in terms of having their own financial safety net in place. There is now a much stronger obligation upon individuals, amid other welfare cuts, to protect against financial loss.No wonder Consumer champions Which? describe Income Protection as a ‘must-have’ for UK workers.With a flat lining economy and so little confidence within industry to invest, circumstances are not going to get any easier for the UK workforce. Many in work dread the possibility of redundancy. They know there are now 5 people for every job vacancy. With so many young people who have never joined the workforce plus a growing number of workers from abroad filling low skill jobs, even temporary work with meagre pay is hard to find. This has produced a perfect storm for anyone made redundant. The potential for 6 months to a year looking for work is a daunting prospect. Latest statistics suggest that some 50% of UK families would be in deep financial trouble after a month or two.For anyone in work who could barely survive a few months without going into debt, there is an insurance product called short-term Income Protection Insurance, also known as Lifestyle Protection Insurance, that could be the answer. For premiums equivalent to little more than £10 per week, they cover any regular wage earner and pay out if they are unable to work due to accident, sickness or unemployment. On average, people taking out this insurance select benefits of between £1,000 and £1,500 per month. This is enough to pay their bills and stretch out their savings during the arduous period of job hunting, or time spent recovering from an accident or illness.This type of cover is available on-line at the lowest cost, search for Lifestyle Protection. Alternatively, for those needing advice, seek out an Independent Financial Advisor (IFA) or insurance broker. Anyone lacking savings and who wants to keep their home and avoid a debt crisis when out of work, this cover has much to commend it.References · * Shelter April 2013· ** Research by think-tank Demos published 2013· *** Legal and General data 2013