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Middle earners will suffer most financially if they have to take long term sickness absence

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Employees earning a salary between £16,000 and £50,000 are most at risk should they be unable to work, since state benefits will not maintain their standard of living if they stop earning due to sickness or disability.

For this group, falling back on to benefits if they fall sick, will have a big impact on their quality of life and is also an increasing cost to the state and the taxpayer, according to a report from the independent think-tank, Demos.

The Of Mutual Benefit report addresses the inadequacy of support in protecting the Squeezed Middle when they are unable to work. It recommends incentivising the provision of income protection through employers as a way for the Squeezed Middle to protect their income as the Government legislates for broader welfare reform. Income protection can pay up to 75% of someone's salary should they be off work due to long term illness or disability.

This continues until either they are able to return to work, or they retire. Currently Employment and Support Allowance provides just £4,901 per annum.

Jack McGarry, CEO of Unum UK, said: "People simply don't believe that ill health or disability will affect them. Yet you are three times more likely to be unable to work due to sickness or disability, as you are to die. 1mn people are sick or disabled each year and half are still disabled a year later. As a nation we are spending too much on life insurance and not enough on income protection.

Just one in 10 UK workers have their income protected if they fall ill. For most people the support available from the state is not adequate and would mean a big change in their standard of living. Unum wants more employers to offer income protection to their workers so that more people have a back-up plan should they fall ill. Employer-funded schemes make the benefit more affordable, available and provides better access to information. What's more, Demos believes that incentivising income protection take-up could actually save the State £2.24bn, whilst protecting more people."