Ministers are being urged to raise the basic rate of statutory sick pay from £3 an hour – one of the lowest in the developed world – after a report found the government’s changes would leave more than 1.6 million people unable to pay essential bills.
Charities are warning that only a fraction of low-paid workers will be helped to avoid the “huge cliff-edge” of lost earnings despite improvements to statutory sick pay (SSP) in the employment rights bill, which will be scrutinised by MPs this week.
A report by Citizens Advice has found that the changes will leave 78% of those on the lowest incomes – the equivalent of 1.6 million people – unable to pay their bills if they have to rely on SSP for four weeks.
Tom MacInnes, the director of policy at Citizens Advice, said: “The proposed reforms to the system are welcome but they don’t go far enough. Crucially, the amount of SSP people receive must be increased so it more closely reflects national living wage.
“Otherwise we will continue to see people driven into hardship and debt when they get sick, or working through injury and illness when they should be recovering.”
The UK has one of the “stingiest” rates of SSP in the developed world, according to the Resolution Foundation, at just £118.75 a week – or £3 an hour – for full-time workers from April.
More than 7 million people in the UK rely on SSP when they fall ill but the paltry rate means someone working full-time on minimum wage would lose 70% of their earnings if they relied on it for a week, despite the changes.
The prime minister, Keir Starmer, previously promised to increase the level of sick pay – when it stood at £95.85 in 2021 – but has chosen to keep the same rate despite other changes in the employment rights bill.
However, the bill will remove two longstanding problems with SSP, meaning the lowest-paid workers will now be entitled to sick pay, and that it will now be paid from the first day of being ill instead of the fourth.
Citizens Advice said ministers must go much further. In a report published on Monday, the charity said it helped nearly 50 people a day with an issue related to sick pay and that SSP was now the single biggest employment concern raised by those seeking help.
It said that more than one in 10 (12%) of the workers it helped with SSP had to rely on a food bank in 2023-24, while one in five needed other charity support.
Alan Barton, an engineer who had to rely on SSP for four months last year while undergoing treatment for bowel cancer, said: “I’d urge the government to take heed of this worrying report. After paying taxes for my 40-year career, SSP nearly caused me financial ruin. It should rise to be more in line with the minimum wage.”
Barton, 65, was not entitled to full pay because he had only worked for his employer for just over a year. He said SSP did not cover even a third of his £1,200 a month rent: “I went from a healthy salary to surviving on what amounted to around £3 an hour. Ministers need to listen to the stories of the countless ordinary people affected. Working people shouldn’t have to choose between harming their health by going back to work too early or paying the bills.”
Citizens Advice, along with the Safe Sick Pay campaign, is urging the government to increase SSP to a percentage of the national living wage – £12.21 an hour for over-21s from April – or a share of earnings.
Increasing it by just £67 a week, to the same level as statutory maternity pay, would replace less than half of earnings of someone working full-time on the minimum wage, the organisation said.
Earlier this year, a cross-party committee of MPs urged the government to increase the rate of SSP after charities warned that it was resulting in a “huge cliff-edge” for people who could no longer pay their bills.
Nye Cominetti, the principal economist at the Resolution Foundation, welcomed the government’s changes but said they “don’t go far enough”.
He said: “With a UK worker on average pay reliant on SSP receiving barely a tenth of their previous pay were they to fall sick for a month, compared to an average of two-thirds of previous pay across other advanced economies, too many workers in Britain literally cannot afford to fall ill.”
A Department for Work and Pensions spokesperson said: “No one should be forced to choose between their health and financial hardship, which is why we are consulting on our plans to strengthen statutory sick pay.
“These reforms – part of the employment rights bill – will help to support people who are managing a health condition in work and raise living standards across the country.”
