8 in 10 cancer patients suffer a financial hit. Here’s how protection policies can offer security
Chris Broome – Chartered Financial Planner
Being diagnosed with cancer can mean facing physical and mental challenges, but research finds that many patients also face financial obstacles.
Research from Macmillan Cancer Support found that 83% of people with cancer in the UK experience some kind of financial impact from their diagnosis. More than 1 in 3 patients said their finances were severely affected.
At a time when you’re worried about your health or need to focus on treatment, financial concerns can place an additional burden on people who are battling cancer. The research shows just how many people are affected by this.
Some of this financial burden is due to patients being unable to work or reducing their working hours. It’s not surprising that 75% of cancer patients experience some loss of income. However, the findings also show that cancer patients are likely to see their day-to-day costs rise, which may be unexpected for many. This may include higher travelling costs or higher energy bills. More than half (54%) of cancer patients see an increase in their day-to-day living costs. Macmillan estimated that for those affected, the average amount added on top of their usual expenditure is £891 a month.
The combination of income loss and higher expenses can place patients under significant financial stress at a time they should be focusing on their health and wellbeing.
Are there things you can do to financially protect yourself if something happens?
There are steps you can take to improve your financial resilience if you’re diagnosed with cancer. However, we often think “it will never happen to me” and put these steps off.
Cancer Research figures suggest that there are around 1,000 new cancer cases in the UK every day. The organisation also states that 1 in 2 people born after 1960 will be diagnosed with some form of cancer during their lifetime. While there have been huge advancements in detecting cancer early and improving treatment in recent decades, the findings are still scary.
Other illnesses and accidents can also place you under financial pressure. So, what can you do to provide a financial buffer if your income is affected by a diagnosis?
The first thing to do is look at the sick pay your employer offers. If you’re an employee, you’ll be entitled to Statutory Sick Pay (SSP). However, SSP is just £96.35 a week and is paid for up to 28 weeks, so it’s unlikely to cover your essential outgoings and it doesn’t provide an income in the instance of long-term illnesses. Many employers will offer an enhanced sick pay policy, which may continue to pay out your full salary or a portion of it, for a defined period, so it’s worth checking your contract.
Secondly, you should review your emergency savings. Having cash in a readily accessible account can provide you with peace of mind in the short term if something does happen to you. It’s often suggested that you have up to six months of outgoings in an emergency fund to meet expenses if you need to take time off work.
Finally, financial protection policies can provide you with a financial buffer if you’ve been diagnosed with a long-term illness, such as cancer. There are two main options to consider:
- Income protection: This type of policy will provide a regular income if you’re unable to work due to an accident or illness. The income provided is usually a portion of your regular salary. It can help you meet regular costs while you’re ill. The policy will provide an income until you’re able to return to work, retire, or the term of the policy ends. As a result, it can provide financial peace of mind if you’re diagnosed with a long-term illness.
- Critical illness cover: If you’re diagnosed with a condition named within a critical illness policy, it will pay out a lump sum. This may include cancer and other serious illnesses like multiple sclerosis, a heart attack, or stroke. What is covered will depend on the policy and provider, so it’s important to check. The lump sum provided through a critical illness policy can be used how you wish, such as paying for regular expenses or paying off your mortgage.
It’s impossible to know what will happen in the future, but by taking steps to ensure your financial resilience even if you become ill, you can have greater confidence. It’s also a step that can allow you to focus on what’s most important, including recovering or spending time with loved ones. If you’d like to discuss what you can do to improve financial resilience, please get in touch.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.