The average UK workers’ savings would last just four months if they lost their income, according to research from Canada Life Group.
The survey found that the average respondent had savings of just £8,849. As UK households spend an average of £531.30 per week this typical savings pot would last just 16 weeks if additional income was halted for any reason. Even if weekly expenditure was cut back to the bare essentials of housing, food and transport to make the spending average £291.90 per week, UK employees’ savings would not last much longer than half a year (30 weeks).
The survey asked participants to estimate the average amount the government would provide if they became ill or disabled and unable to work. The average estimate was £172 per week, and a third (34%) believed the amount would come to more than £200 per week. But in fact people who qualify for the Work-Related Activity (for those who could be assisted back to work) Employment and Support Allowance group are eligible to receive a maximum of £102.15 per week, £70 less than estimated.
Paul Avis, marketing director of Canada Life Group, warned that many UK workers are complacent about the possibility of losing their income. “When it comes to serious illness or injury many people assume it either won’t happen to them or they can rely on state benefits when their savings eventually run out,” he said. “But being unable to work is more common than people think, and our research underlines the fact that depending on savings or state benefits is a flawed plan for most employees.”
He suggested that organisations offering income protection as a benefit could help. “No employer wants to see their staff struggle if they are unable to work because of illness or injury, and showing employees they are protected and cared for acts as an effective retention and recruitment tool,” he added.
