UK employees are burying their heads in the sand and leaving themselves woefully unprotected financially in the event that something unpredictable happens, leaving them unable to work, according to new research from Unum. This is despite the average worker saying that they could only survive financially for around four weeks without their full current salary.
21%, equivalent to 5.5 million adults, admit to having no financial back up in place at all, whether it is savings or an insurance policy, such as income protection, or even the ability to rely on their partner or family.
Half have been off work for more than a week due to illness or injury at some point in their career and 2 million workers currently in employment have had to take off six months or more.
While workers expect to receive full pay from their employer for four weeks should they be unable to work due to illness or injury, the reality is often quite different as 1 in 10 of those who have been off work sick for over a week did not receive full pay for any part of their absence.
Marco Forato of Unum says, “It is really quite concerning to see that so many people are living on a knife edge when it comes to financial protection. A month is a very short time in reality if you suddenly find yourself unable to work. Yet too many people seem to be either unaware that they can take steps to protect themselves against an unpredictable event that can lead to the loss of their full income for a long period of time or are burying their heads in the sand and adopting an attitude of ‘it won’t happen to me’.”
On a regional basis, Unum’s research reveals that workers living in Wales and the North East are potentially the most exposed with 32% and 24%, respectively, admitting to having no financial security net should they be unable to work. Those in the South East and Scotland seem the best prepared, with only 17% and 16% of workers living in these areas, respectively, having no back-up plan.
Of those who say that they do have a financial security net, the burden on loved ones should anything go wrong could be significant, with a quarter saying that they will have to rely on their partner and another quarter relying on their family for support should they be unable to work. Only one in 10 workers has any form of financial protection cover and say that they would have to rely on their own savings.
Income protection: News update: 21 July 2010