How much should I be saving for an illness or an injury?11 Jul 2017
How much you should be saving for an illness or an injury is an open-ended question. How long do you think you might be off work due to an illness or an injury?
Recent statistics from the Health and Safety Executive states an estimated working days lost per worker due to self-reported work-related illness or injury has been a broadly flat 30.4 million a year since 2010.
On average, each person suffering took around 16 days off work, 20 days for ill health cases and 7.2 for injuries. Without sufficient savings, company sick pay or income protection insurance this could have devastating and long lasting effects for any family, couple or individual unable to pay their bills.
The average days lost per case for stress, depression or anxiety (24 days) was higher than for musculoskeletal disorders (16 days).
If you’re either self employed or PAYE and your employer’s sick pay isn’t that long you should save enough to at least cover this amount of time.
However, remember these are averages and your time of work could be longer! If that were the case could you cover your bills, provide the care you need, or continue to maintain the life your family is used to whilst you are off-work? How long will it take to recover your financial stability?
Income Protection a good way of ensuring that your income remains acceptable whilst you are off work – however long that is.
Only one in 10 working-age families has Income Protection cover in any form, compared with the 23% of households who have bought a pet medical policy. Bizarre when you consider the deeper impact having time off work due to an illness or injury can do to a family without adequate savings or insurance.
Income Protection Insurance
Not enough saved, in a job where work place injury is a strong possibility, no company sick pay, worried you might lose your job if off too long? If any of these apply consider Income Protection at a cost that could be as low as 69p per day.
Taking out the right policy means Income Protection insurance will provide you with an income should you get injured, become sick or lose your job through involuntary redundancy. You can start receiving an income immediately, if for example, you are self-employed, or you can defer it until your employer’s sick pay ends.
It’s the one protection policy every working adult should consider.
Which? Money 2013.
The monthly income you receive can then be used for any purpose you choose, including paying the mortgage or rent, household bills, medical bills, credit cards, nursery costs and so on. The maximum amount you could be paid each month varies from insurer to insurer, broadly 50-70% of your gross monthly income (i.e. your earnings before tax) and tax free under the current rules, although this might change in the future.
We can even get cover for you if you are self-employed and can’t evidence your earnings.
For more information on Income Protection click here.
For the HSE web page click here.