More than 10 million overestimate value of Statutory Sick Pay – The Exeter

Nearly one in three people (32%) have overestimated the value of Statutory Sick Pay – which currently stands at £109.40 per week – according to health and protection provider The Exeter.

Data from the Office of National Statistics (ONS) shows there are more than 30 million patrolled workers in the UK, and so this percentage equates to more than 10 million miscalculating the amount of Government support they could receive if they became ill and were unable to work.

The Exeter’s findings, published in its Health & Financial Fears Report 2023, showed that more people overestimated the value of Statutory Sick Pay than those who knew the amount of support they would receive (27%).

A small proportion (8%) believed they would receive more than double the actual amount.

More than one in six (18%) did not know whether they were entitled to receive employer sick pay at all. 

This was also true in the private sector, where 13% were not aware of their exact entitlements.

Almost one in five (19%) were not entitled to any employer sick pay, and almost half (49%) would receive support for no longer than three months.

Notably, more women (20%) than men (18%) reported that they did not receive any employer sick pay, with women (17%) far likelier than men (9%) to not know their personal sick pay arrangements.

When asked to estimate the monthly cost of an income protection policy, the average guess was £35.20 per month, higher than the actual average of £24 for a 2-year limited benefit term, the most popular product sold in 2022.

Only 6% of all of those surveyed said that income protection was unimportant.

Jamie Page, head of protection distribution at The Exeter, said: “It’s worrying that so many workers either overestimate the value of Statutory Sick Pay or are unsure whether they are entitled to it at all.

“In the event of a long-term illness, workers may find themselves dependent on a highly reduced income or without a financial safety net at all.

“This can create added stress and potential hardship for themselves and their families as they burn through their hard-earned savings – if they are fortunate enough to have money set aside.

“Although workers are not always clear on its cost, they do evidently recognise the value of income protection insurance.

“However, the first step in covering any gap in sick pay provision is knowing how much you currently would receive, and for how long.

“From there, a conversation with an independent financial adviser is always the best way to understand the wider options available to improve your financial security.”

Andrew Wibberley, co-chair at the Income Protection Task Force (IPTF) added: “This new research highlights the opportunity to start a conversation that helps a customer understand the reality of their current financial situation and how they can strengthen it.

“One suggestion from this years’ Income Protection Awareness Week, was not to scare potential customers by focussing on the level of benefits available to them, but rather give the good news that they do at least have something.

“By making customers aware of what’s available and how they could get to a level of income that they will likely need should they be unable to work due to illness or injury, we can have a positive conversation rather than simply highlighting a gap in their understanding or making them feel like the problem is too big to solve.”