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What are my options for salary replacement if I’m sick?

Updated: Jun 2, 2023

Being young doesn’t always equal being healthy. Everyone needs time off work sometimes, to prioritise their physical and mental health. But if you can’t work, and can’t bring the income in, what are your options for salary replacement?

The thought of falling ill isn’t something that crosses a lot of our minds when we’re in our 20s or 30s. We like to think that our bodies and minds are built to push through anything – including getting into work on a Monday at 9:00am after a whole weekend of binge drinking.

But we’re not really talking about hangovers or hangxiety. Everyone struggles with their health, physically or mentally, at some point in their lives, and it’s important to prioritise yourself at this point – not think about how you’re going to be paying the bills. It’s not something we can predict, but it’s something we can plan for.

Why should I think about salary replacement?

Well, the stats speak for themselves. According to the ONS National Population Survey (2019), 3,075,487 people aged between 20 and 34 years old are expected to have a health condition that lasts more than a year, with the most common conditions being mental health related (like depression or panic disorders).

The average salary for someone in the same age group is £611 per week (minus taxes and National Insurance of course) – that’s money in your pocket. And the average spending habit of someone under 30 years old is £531.50 (including rent and bills) per week.

Now imagine that the £611 per week just stopped, because you couldn’t work due to illness – where would that £531.50 per week come from?

That’s why it’s important to think about salary replacements, or financial support schemes or products that could help you get through those tough times more smoothly.

Dipping into your savings

The average Gen Z or Millennial has saved between £3,500 to £6,000, according to Raisin UK. That seems like a chunky amount now, but with all the rent, the bills and other expenses adding up when you can’t work due to illness – that money is going to disappear pretty quickly. Plus, let’s be honest, you worked hard to save up. Wouldn’t you rather use that cash for something more exciting than covering your regular bills?

Some of us may not even have any savings (the paycheck to paycheck life, eh?) and relying on the Bank of Mum and Dad isn’t always the best option.

Statutory Sick Pay or SSP

A government option that you could look to is Statutory Sick Pay or SSP. But let’s be real, that pays about just over £100 per week, and we’ve already established that Gen Z and Millennials spend about five times that per week.

And if you’re a freelancer, you won’t even qualify for SSP. You could qualify for Employment and Support Allowance (ESA), but only if you’ve made enough National Insurance contributions, and even then, it probably isn’t enough to financially support you for as long as you might need it.

Universal Credit

This is another form of government financial support that pays you if you’re out of work or can’t work. How much you get depends on your circumstances, but you could receive

between £250 to £330 per month – and again, that is nowhere near enough in today’s economy!

Also, the form is like 84 pages long – talk about making it difficult to get financial support when you’re already struggling with your health!

Employer benefits

There are lots of benefits your employer could give you, it really depends from company to company – so make sure to check your contract or chat to your HR team about how your employer supports you financially if you can’t work for a certain period of time.

Some examples of benefits include paid sick leave or private health insurance – read our full blog on other benefits you could get from your employer.

Income protection insurance

This is a type of insurance that you could take out to protect your income.

We’re always talking about financially protecting our cars, or expensive tech stuff, so if they were lost or stolen, we’d be able to claim the money back. But the biggest thing you could benefit from protecting is your income, because life just happens sometimes, and it’s not always in our control.

Income protection insurance basically pays you 50% to 70% of your income if you can’t work due to illness or accident. That means if you earn £25,000 per year, income protection insurance could pay you roughly £1,400 per month to help with your expenses if you couldn’t work – which is wayyyyy better than any other option we’ve talked about here!

Plus, you’ll get the recovery support you need from the insurer to help you get back to work – something no state benefit package offers.

We've partnered with the experts at Caspian Insurance who can help you to find the right income protection insurance policy based on your personal needs. Click below to find out more.


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