Income Protection  

Financial impact of cancer puts families’ futures at risk

Financial impact of cancer puts families’ futures at risk

Almost three in four UK workers would struggle to cope with the financial impact of cancer, research has revealed.

Some 72 per cent of employees surveyed by Canada Life Group Insurance said they would struggle if their income fell by £570 a month - the average amount lost by 80 per cent of families after a cancer diagnosis.

The figure was even higher for single-parent workers, with 80 per cent saying they would struggle to cope and 63 per cent admitting it would be ‘very difficult’.

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Despite this, only 18 per cent of employees said they had some form of critical illness or income protection cover to help them financially if they were to develop cancer or another serious illness, falling to 10 per cent for single parents.

Cancer now affects one in two people during their lifetime and accounts for nearly seven in 10 critical illness claims – yet 46 per cent of those surveyed said they were not worried by their lack of protection.

UK employees have an average of £3,292 in savings, which would last less than six months if used to fund the average £570 shortfall in monthly income.

Nearly half (45 per cent) of respondents said they would need to apply for state benefits to get by if they were diagnosed with cancer and lost their income, at a time when such support is becoming increasingly difficult to obtain.

The findings are based on an online survey of 1,010 UK employees in full and part-time employment carried out in May 2017.

Paul Avis, marketing director at Canada Life Group Insurance, urged employers to consider workplace benefits that could help those affected by cancer.

“Group income protection and critical illness policies provide vital financial support through difficult periods of illness and are relatively inexpensive to provide, and only 7 per cent of respondents had cover such as this in place,” he explained.

“They also come with a host of support services such as counselling and rehabilitation, helping to enable a return to work if possible: a positive result for both employer and employee.”

Gemma Siddle, director of client services at Eldon Financial Planning in County Durham, said she did not find the figures surprising – but that cash-flow modelling can boost the uptake of cover as it enables clients to see the impact of a critical illness on their circumstances.

She said: “Workplace benefits can be hugely valuable in that kind of situation. With a personal policy, there might be loading on the premium based on [a client’s] health record, whereas with a group policy that does not get taken into account, so it could be reasonably cheap in comparison.”

simon.allin@ft.com