One in five could be ruined by long-term incapacity

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One in five could be ruined by long-term incapacity

One in five UK workers have no idea how they would cope financially if ill health forced them to stop working for six months or more, according to a survey by Drewberry.

Even among those who did have some kind of plan in place to cover themselves if they were too ill to work, protection adviser Drewberry’s poll of 2,000 adults in August found there was still cause for some concern. 

For instance, 44 per cent of respondents planned to live off their savings if they couldn’t work due to long-term incapacity.

But only 25 per cent of those surveyed in Drewberry’s 2015 protection survey said they had enough in savings to cover their monthly outgoings for more than six months.

Other than savings, there were three other notable means of coping during long-term incapacity listed by those surveyed.

One in four said they would use state benefits, a quarter would rely on their partner’s income and one in 10 would need to ask their parents for help.

Tom Conner, director at Drewberry, said: “With the majority of Britons only having enough savings to cover their essential outgoings for a couple of months and state support in the form of the Employment and Support Allowance only paying just over £100 per week, it’s vital that people think seriously about how they’d cope financially if they were to suffer a long-term illness or injury.

“Statistically, there is a one in five chance of having to take three months or longer off work due to ill health so it’s an issue that shouldn’t be taken lightly. 

“Fortunately, there are some great income protection products around that can neutralise this risk and prevent so many people from having to gamble on their financial future.”

Adam Higgs, head of research at F&TRC, said: "Advisers should look on these results as an opportunity to add value. 

“Employed and self-employed people should be guided towards income protection where they have insufficient cover and particularly towards the best policy for their circumstances.”

emma.hughes@ft.com