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22nd August 2018: As economic growth continues and the labour market reaches full employment, leading pension, investment and income protection provider, Friends First, has released the findings of a new ‘Employee Protection Index’. This recent study by B&A indicates that mental health issues are now the number one workplace illness with 2 in 5 (38%) workers admitting to suffering from stress and anxiety during their career, followed by cancer (33%) and chronic back pain (32%).
Worryingly for the future millennial workforce, mental health issues emerged as most prevalent amongst younger workers with almost half (48%) of under 35’s having taken extended sick leave (more than one week) due to stress or anxiety.
More generally, 4 in 10 (38%) workers reported having taken extended sick leave due to an accident or illness with the resulting sick leave period being on average 14 weeks.
The study shows that employees in Ireland vastly underestimate the likelihood that they will experience a significant income interruption due to their health. Only a mere 7% say they anticipate needing to take extended sick leave in the future. This is despite the fact that 76% of workers said that they, or someone they know, have experienced extended sick leave (more than one week) due to an accident or illness.
When it comes to workplace policies and guidelines on extended sick leave, a quarter of employees (25%) say they would not be paid for a period of sick leave, even for one month or less. 2 in 3 (64%) said they would be paid for up to one month but this drops significantly to one third (36%) for sick leave stretching beyond six months. Friends First claims data shows that the length of the average income protection claims is five years, highlighting a potentially major income gap for workers.
Despite being aware of the prospect of their income being interrupted due to unexpected sick leave, 2 in 5 (40%) of those surveyed admitted to having no plan and no idea what they would do if they found themselves on sick leave with no income.
Almost 9 in 10 (88%) of those surveyed described themselves as being “reasonably healthy” or “very healthy” with just 10% saying they are less healthy than they would like to be.
One in two workers (48%) say that they are regular savers, with €335 cited as the average monthly saving. The top use is for “a rainy day”. However – to contextualise a rainy day – 1 in 2 (47%) workers say that if left without pay due to illness, they would rely on their savings but would run out of money within three months and would need to seek out an alternative source of financial support. Family and friends were identified as the next port of call with 2 in 5 (42%) workers saying they would turn to their nearest and dearest for financial support. Staggeringly, the average amount of time workers on sick leave would expect this financial lifeline to last is 17 weeks.
Commenting on the findings of the ‘Friends First Employee Protection Index’, Karen Gallagher, Protection Director with Friends First, said:
“The research shows that mental health has the potential to impact on us all and the effects of stress and anxiety know no boundaries when it comes to age, gender or profession. It is also concerning to see that despite a strong level of awareness around the potential to be without an income in the event of extended sick leave, a large cohort of workers remain financially unprepared. Income protection as a form of cover is often overlooked in the false optimism of our ‘it won’t happen to me’ attitude. I would really implore income earners to think about taking steps to safeguard one of their most valuable assets, their ability to sustainably earn a living.”
According to Friends First income protection claims data, the company paid out €37.5 million to over 1,500 claimants in 2017, with the top three stated illnesses being orthopedic (25%), psychological (21%) and cancer (20%). Friends First data indicates that the average income protection claim lasts 6.5 years, which represents a significant income interruption.