Lack of Sick Pay Provision is Latest Threat to Already-Stretched UK Home Owners
Lack of sick pay provision is latest threat to already-stretched UK home owners, warns leading insurer.
As the general election looms, confusion over potential mortgage increases and concerns over housing costs are at a high. Leading provider of income protection insurance, PG Mutual Health and Wellbeing, is warning UK home owners not to ignore the threat income loss due to illness or accident poses to keeping up with their mortgage repayments.
UK homeowners seem to have faced threat after threat to their financial stability and mortgage repayment levels over the past year, with Shelter reporting 60% of people in the UK were struggling with their housing costs at the start of the year. According to their figures, over 3 million home owners were concerned about missing their mortgage repayments in January.*
As more and more evidence suggests, UK home owners are struggling in their current circumstances, leading insurer, PG Mutual, are warning one of the biggest threats to the stability of borrowers’ mortgage repayments is one that no one seems to want to think about – that of unexpected illness or injury. The consequences of this could potentially force home owners onto long-term sick leave – which could see them trying to manage repayments on Statutory Sick Pay (SSP) of just £87.55 per week.**
It appears many UK workers have no plan or protection in place for this eventuality, with only 4% having income protection insurance.^ Historically, many have assumed their employer will pay them their current salary until they are better – unfortunately this is often not the case. Worryingly, a survey by PG Mutual found 76% of people had no idea how much SSP they are entitled to – with many assuming it would be more than the current rate.
While no one likes to think about falling ill or having an accident, statistically a person is three times more likely to have to take sick leave during their working life than they are to die^ – something which would usually not be covered by common policies such as life and critical illness insurance. Macmillan reported over 250,000 cancer patients were struggling to keep up their housing payments at the end of 2014† – and with potential rate rises likely following the general election, PG Mutual are urging home owners not to ignore the threat having to take sick leave can pose.
According to predictions by the Centre for Economics and Business Research (Cebr), mortgage payments could rise by at least £81 per year in 2015.‡ This isn’t good news for those already struggling, as Shelter predicts should they increase by more than £100, many borrowers would struggle to make repayments.*
PG Mutual Chief Executive, Mike Perry, comments, “We are constantly reading reports in the media concerning how stretched UK home owners are already – and this is with many of them earning their full wage. No one likes to think about getting ill and having to take time off work, but if you ignore it, you could find yourself suddenly short of what you need to pay your mortgage. And the last thing someone needs when they are already going through a difficult time is a threat to their home. Our experts can provide friendly advice on the options available to protect yourself against this happening to you.”
*Shelter, January 2015
**DWP Website, April 2014
^UNUM, January 2012
†Macmillan, December 2014
‡Cebr, January 2015