22 February 2016
- One in three don’t know how they’d cope if they suffered a critical illness
- Biggest worry is not being able to maintain payments and bills while ill
- Around half would rely on savings to get by but average pot is just £7,700*
Critical illnesses such as cancer, a heart attack or stroke can be very stressful for both the person diagnosed and their families, but worries over how to continue paying the bills adds to the pressure, according to research from Nationwide Protection.
While some people continue to receive all or part of their salary while off work, others are only entitled to statutory sick pay of just £88.45, posing a potential challenge to household budgets. However, just 14% of people currently have critical illness cover, according to the Nationwide survey. This is despite nearly three in five (57%) people having had an experience of critical illness – either themselves or through family and close friends.
The most prevalent reasons for not having critical illness cover are:
|Reasons for not having critical illness cover
|Willing to take the risk of getting ill
|Have sufficient finances to cover sickness period
|Don’t worry about things until they happen
|Too young to require critical illness cover
|Don’t believe they will become critically ill
However, the Nationwide Protection poll, of 2,000 UK adults, shows that less than a third (31%) could afford to support themselves if they were unable to work due to a critical illness, with a further one in three (36%) saying they wouldn’t know how to cope financially. This income shortfall would lead to nearly half (48%) relying on their savings to plug the gap. But Nationwide customer data shows the average person has just £7,707 saved - an amount that could quickly dwindle if it was being used to pay the mortgage and other bills.
The biggest financial worries around critical illness are:
|Biggest worries if critically ill
|Not being able to paying the bills
|Getting into debt due to illness
|Not being able to pay the mortgage
|Having to forego holidays due to cost
|Cutting back at Christmas and birthdays
The research highlighted that only those over 55 years old were really in a position to rely on their savings with more than a quarter (28%) feeling they had ample money to cover themselves, compared to just four per cent of 18-24, six per cent of 25-34 and eight per cent of 34-44 year olds.
Customers who are diagnosed with a critical illness and are concerned about how they will cope financially are encouraged to get in touch with Nationwide who can provide advice on a range of solutions and services available to support customers, including a specialist advice service for those living with cancer.
Rob Angus, Nationwide’s Strategy & Propositions Director for Financial Planning, Protection and Investments said: “A critical illness diagnosis can be devastating and stressful for the whole family, but if you’re unable to work or are forced to give up work, then the worry of how you will pay the bills can add to the pressure.
“Our research shows that many people don’t consider getting cover, despite most having experienced critical illness either themselves of through friends and family. This approach of throwing caution to the wind means that many are unprepared for how they will cope with day-to-day bills without factoring in additional costs for them and their family.
“Many expect to rely on their savings, but the research shows this is only really an option for older people who have managed to build up a sizable nest egg over a number of years. Having a critical illness policy in place takes away the worry of how you will cope financially and instead focus all your attention on your recovery.”