Wellbeing & Benefits

New research from Direct Line Life Insurance reveals that Brits are in the dark when it comes to sick pay, with more than 2.5 million workers unaware that they would face a significant salary shortfall if they are unwell and are unable to work.

In fact, many Brits mistakenly assume their employer would continue to pay their full salary if they were off sick, with people believing on average they would receive it for three and a half months. However, the reality is very different, as 43 per cent of firms reduce an employee’s wages to statutory sick pay after two weeks of an employee being unable to work through illness. One in six firms (16 per cent) immediately switch to paying statutory sick pay once an employee has been off work for four days.

Employees are entitled to statutory sick pay if they are too ill to work and have been off work more than four days in a row. They are eligible to receive it for up to 28 weeks, at a rate of £89.35 a week, less than a fifth of the average UK weekly wage of £510. However, just one in twenty-five (4 per cent) Brits know how much they would receive in statutory sick pay, and eight per cent have never even heard of statutory sick pay.

However, it is not only salaries people lose out on if they are off sick; one in five (21 per cent) firms that pay bonuses withhold these if an employee has been off work on long term sick leave. More than a third of firms (33 per cent) will pay bonuses based on pro-rata analysis of days worked and 14 per cent will pay a discretionary reduced rate.

Furthermore, almost a third (30 per cent) of HR professionals said the qualifying period for their company sick pay schemes is between 1 and 2 years. Additionally, 92 per cent of HR professionals say their company would require formal documentation to authorise any period of sickness, and 36 per cent said they would require additional paperwork if the absence is for more unusual reasons.

Trevor Bush, Head of Direct Line Life Insurance, commented: “This research highlights a worrying disconnect between peoples’ expectations and what they would actually be entitled to if they were to unexpectedly fall ill. Statutory sick pay is significantly lower than the national average salary and people are only eligible for 28 weeks, so those with long term conditions could find themselves in struggling financially if they are unable to work for a long period of time.

Direct Line offers critical illness cover as an add-on, at an extra cost, when buying life insurance. This could provide some financial security for those diagnosed with one of a number of specific critical illness during the policy term, by paying a cash lump sum.”

Trevor Bush continues: “With 90 per cent of organisations requiring formal documentation to authorise sick leave, it’s important for people to be able to quickly secure sick notes or medical certificates when they’re unwell. This is why Direct Line has recently partnered with Doctor Care Anywhere, a virtual GP consultation service, so that in the event of non-urgent medical enquiries, customers can consult with a GP quickly and easily, issuing sick notes/medical certificates, prescriptions and referrals within a matter of minutes. This provides policyholders and their families with more convenient appointments, helping them avoid potentially long waits for consultations”.

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