Cirencester Friendly has urged advisers to help tackle the problem of Britons being unprepared for a long-term absence from work, in response to research showing 53 per cent of workers would depend on the state in the event of being off due to illness or injury.
The income protection provider commissioned YouGov to interview a sample of 2,007 UK adults, and found that 41 per cent of workers think they would last less than three months before they ran into financial difficulties.
Cirencester pointed out that although employment contracts will vary, workers who are off sick for four or more days in a row are entitled to a minimum of £88.45 through statutory sick pay - paid for 28 weeks by the employer.
Thereafter, the claimant has to make an application for employment and support allowance, with an assessment rate of £57.90 per week for under 25s and £73.10 for over 25s is paid for up to 13 weeks and then either £102.15 or £109.30 per week depending on circumstances thereafter.
The current UK average earnings is £488 per week so the provider argued that even a temporary reliance on statutory sick pay or employment and support allowance would result in a significant financial shortfall for many workers.
Office of National Statistics data this year showed that over 2.5m people have been unable to work for three months or more and are claiming illness-related benefits.
Rebecca Young, head of marketing at Cirencester Friendly, commented that the findings should serve as a warning to the adviser community and UK population as a whole.
“Protecting earnings is an important aspect of sound financial planning; those who are unable to work due to illness or injury face a dramatic reduction in their income which in turn, results in difficulty making mortgage repayments or paying rent, buying food and paying bills.
“Responsible advisers have a duty to ensure that their clients have put adequate safeguards in place should the worst happen.”