5th June 2015
The rise of self-employment and zero-hours contracts means a third of the British workforce no longer has sickness cover to protect them if they fall ill.
Research by insurer LV= shows nearly 11 million UK workers are not eligible for company sick leave, meaning they would have to rely on statutory sick pay, or receive nothing at all if they are self-employed.
Around one in 10 workers in the UK are self-employed and would find themselves without any income if they became unwell. Another 25% of the UK workforce, the equivalent of eight million people, are employed by a company but only receive statutory sick pay of just £88.45 a week if they become ill – more than £300 less than the average weekly take home pay.
Of the eight million employees that only qualify for statutory sick pay, 1.2 million of them are on zero-hours contracts and one in 10 have not worked at the company long enough for the company’s sick pay scheme.
Nearly a quarter of workers that do not receive a company sick pay don’t get anything due to other reasons, such as being temporary or part-time employees.
More people are working for small and mid-sized companies which tend to have less generous sick pay packages than larger employers, meaning they are less likely to receive full salary sick pay for a prolonged period of time.
LV= research shows a third of workers in their 20s work for smaller business and one in five of those over-50 are employed by smaller firms, suggesting younger people are financially more vulnerable should they fall ill.
Myles Rix, managing director of protection at LV=, said: ‘The UK economy is changing, with zero-hours contracts, freelancing, contract work, and self employment all becoming more common.
‘As a result, fewer workers now qualify for company sick pay, meaning they could struggle to meet their financial commitments if suddenly unable to earn a salary due to accident or illness. A contingency plan such as income protection offers workers peace of mind so they can focus on receiving without worrying about whether they can pay their bills.’