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 employees’ finances, with many unable to pay their household bills for more than six to eight weeks in the event of illness.
Over two thirds (67 percent) of those in the manufacturing industry worry about their financial security in the event of illness, while 38 percent said they had lost sleep over concerns. Worse still, a third (34 percent) admit that financial stress was impacting on their job performance.
Despite this, only half (50 percent) of those in the manufacturing sector have access to sick pay insurance.
The situation is exacerbated by their high levels of debt, averaging circa £2,337 (above the UK average of £1,910). However, those in the manufacturing industry came out as top savers, with an average of £5,578 (above the average £3,762) – but despite these savings, the report also highlights that employees are overly optimistic about their ability to withstand financial shock – with employees within the manufacturing industry under the pretence they could last for more than six months on statutory sick pay.
Brian Hall, managing director of BHSF Employee Benefits, said: “The combination of a lack of savings and debt, 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 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.
“It is very worrying that employees appear to be in a state of denial over how precarious their financial situation is in reality. All it takes is one short bout of ill health to leave two thirds of the entire UK workforce in serious financial straits that could take many years to recover from.”
It is those who 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, with more than average unsecured debt. In fact, debt levels have increased for this group over the last five years. This means 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 said that employers could do more to help employees become more financially resilient – by organising sick pay insurance schemes that can provide a safety net at low cost to the employee and no cost to 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,” added Mr Hall. “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.”
‘A high wire with no safety net’ is available to download at: www.bhsf.co.uk/reports/sickleave