Unexpected bills and time off work are putting added financial pressure on people diagnosed with a critical illness, according to research.
On top of day-to-day living costs that need to be covered if someone is unable to work, the average additional cost of being ill or caring for someone who is ill amounts to £1,623, according to a survey of more than 3,000 people carried out for protection provider Royal London.
Transport to the hospital, doctor or chemist was found to be the most common extra expense for those with a critical illness, incurred by 67 per cent of those surveyed and costing an average of £391.
Meanwhile, a third (33 per cent) of those who faced a burden on their finances cited higher utility expenses as a cause, with the costs averaging at £675.
Home alterations were the most costly expense – an average of £1,764 – although they were less common, with only one in six people needing to modify their homes.
More than half (51 per cent) of those who had been diagnosed with a critical illness said they faced a shortfall in their income, with many being forced to make up the deficit using their existing day-to-day personal finances or by raiding their savings.
Although employees who are too ill to work are entitled to statutory sick pay, Royal London said the payments of £89.35 per week for up to 28 weeks would not be enough to cover the extra expenses incurred as a result of the illness.
Yet one in five (20 per cent) of those surveyed said they had no savings at all to fall back on if they were diagnosed with a critical illness.
The research was based on a survey of 3,004 UK adults carried out from 19 to 23 June 2017 by Opinium.
Debbie Kennedy, group head of protection strategy at Royal London, said: “Coping with a critical illness is a worrying time. Our research shows that although people expect the illness to have a financial impact they aren’t prepared, with a fifth not having any savings to fall back on.
“As increasing numbers are being diagnosed with a critical illness, we would urge people to try to get into the savings habit and consider speaking to a financial adviser about their options.”
Robin Melley, director at Shropshire-based Matrix Capital, said people can underestimate the financial impact of critical illness – including the psychological effects of dealing with such a life-changing event.
He added: “I think a lot of critical illness and life cover is probably sold on the back of mortgages, and there is not a great deal of thought put into it. The only true way is to do a lifetime cash flow analysis and create a scenario around what the circumstances might be if they suffer critical illness.
“The vast majority do not have access to lifetime cash flow and don’t think about it too deeply – but they should do.”
simon.allin@ft.com
