A new report on social care, published recently by the Kings Fund, has identified the fact that the proportion of working age adults requesting social care has risen by nearly 4% in the last 3 years . This startling statistic gives pause for thought about why this might be happening and whether enough people of working age are adequately prepared financially for the prospect of long-term illness or disability. Here the LEBC blog takes a deep dive into the details to examine what the awareness is around working age sickness benefit and whether there could be mileage for employees taking out their own private cover.
The reasons for this increase in adults seeking social care are liable to be multiple and complex. We could question whether this is simply down to an increasing awareness of entitlement among those of working age however we can see from Government figures in the Family Resource Survey  that Disability levels in working age adults have in fact climbed from 15% in 2010/11 to 18% in 2017/18. So, we can be certain that there is an increasing risk that those of working age will find themselves looking to the care system for assistance.
In the first instance it appears that there is a concerning lack of awareness among employees of exactly what financial compensation they are entitled to should they end up relying on sickness benefit. Figures from a survey carried out by Direct Line suggest that only 4% of employees know exactly how much sick pay they are in fact due . Figures also show that only around half of firms provide anything beyond Statutory Sick Pay after two weeks of an employee being off ill .
The basic entitlement under the law is Statutory Sick Pay, which is provided by an employer for up to 28 weeks at a rate of £89.95 a week. If we compare this to the ONS estimate  of the average household spend per week of £572.60, we can see that SSP will prove an inadequate resource for most people if it must be relied upon solely for any extended period.
Looking at these numbers we can quite clearly see that it may well be in the interests of many workers to seek out insurance for a scenario in which they are left off work long term with illness or disability. So that leads us to Income Protection Insurance which will provide for a portion of the employee’s salary, in the event of illness or disability, until a return to work is possible. Policies can provide continuation of a proportion of income either for a limited period selected by the consumer or until expected retirement age. If provided by an employer, the benefit payable is paid to the employer and taxed through payroll to the employee. Where an individual buys their own policy the income is paid tax free.
These policies have a waiting period, which can be selected by the consumer to reflect the amount of time they could live off savings before needing a long-term income replacement. This can be between 4 weeks and up to 2 years and if longer, reduces the cost of cover as the likelihood of a claim is lessened.
The benefit payment period can also be selected at outset, this can be for 2, 5, 10 years or right through to expected retirement age. The longer the benefit payment period the more a potential claim is worth so the cover will cost more.
Consumers should be careful in selecting a policy. Policy terms can vary significantly between products and insurers.
Costs vary depending upon several factors. These include the nature of the normal occupation, age at outset, whether an individual is in ill health or smokes, those with dangerous pursuits such as private flying, equestrian sports or mountaineering may also pay more or have their cover restricted. Office based jobs generally pose less risk than say a job in construction. Travel abroad may also pose problems if this is frequent and to a region where medical facilities may be poor.
To find out whether you are already adequately covered by an employer sponsored scheme or have sufficient savings to weather any interruption in your earnings, talk to our advisers who will be able to provide a range of options and costs should you need to supplement what the State provides.
Public Affairs & Communications Adviser, LEBC
Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views.
 King’s Fund – Social Care 360 – April 2019 (Link)
 Office of National Statistics – Family Resource Survey: Financial Year 2017/18 - 28 March 2019 (Link)
 Direct Line for Business – Research Carried Out by Opinium – 30 January 2018 (Link)
 Direct Line for Business – Research Conducted by Pureprofile – 30 January 2018 (See Above)
 Office of National Statistics - Family spending in the UK: April 2017 to March 2018 - 24 January 2019 (Link)
Please click below to download a PDF version of this articleDownload