When someone falls seriously ill through a stroke or cancer, it’s the immediate health effects that are understandably at the forefront of your mind. But the financial impact can be severely damaging too.
Lost income is just the start of it – increased living costs and the impact on carers further compound the financial pressure.
According to a new report from the Stroke Association, a quarter of strokes occur in people of working age and there are over 300,000 people under 60 living with the effects of stroke in the UK. And yet, very few people of working age are financially prepared.
Key findings from the survey include:
- 65% of those aged between 25-59 reported an increase in household bills and expenses. The same percentage reported a fall in their income.
- 69% of people whose income went down said the main reason was that they were now unable to work.
- More than a third cut back on food, while 80% are worried about their financial future.
- Almost 60% of carers reported that caring for their loved one had affected their own employment.
According to the Stroke Association, stroke is the leading cause of severe adult disability and can leave people with impairments, like extreme tiredness and cognitive difficulties affecting memory and attention. Together these can make work extremely difficult, if not impossible.
Is a rainy day fund enough?
So what’s the answer? We’re often advised to keep six months’ expenditure in a savings account as a rainy day fund. But not only is this unrealistic for many of us in the current climate, the financial repercussions of stroke and cancer are likely to far outlast your savings fund.
How about statutory sick pay and state benefits? Statutory sick pay is only paid for 28 weeks, while there’s been a restriction of state benefits in recent years, with Employment Support Allowance unavailable for many. In any case, state benefits are unlikely to cover all your family income, or even come close.
The Stroke Association is calling for government action, but there are also things you can do yourself. Budgets are tight at the moment, but it’s worth considering income protection, possibly in conjunction with critical illness cover. First of all though, if you’re in work, ask your employer what cover it offers if a staff member falls seriously ill. You may find you’re already insured.
We all hope the worst won’t happen, but it can be devastating when it does, not just on your health, but also on your family’s finances. It’s worth a frank discussion at least.
Have you had to deal with a serious illness? How did you manage financially and what advice would you give someone thinking about protecting their finances?