With drastic cuts lined up for the benefit system over the next four years, George Osborne has pledged that while he is Chancellor; “it will always pay to work”. A new twelve month limit for sickness benefit makes it more important than ever to protect yourself with income protection that will cover Contractors for long term illness or injury. The good news is we have used our influence with insurers to secure good quality cover with the first two months premiums completely free exclusively for our clients…
With the country facing the biggest fiscal deficit in Europe, we knew that the day would come when severe spending cuts would be needed and last week’s Comprehensive Spending Review. The Chancellor made it clear that he would create a fair economy where it pays to work and families on benefits will never be better off than families that are working. Whilst this is a positive step towards clearing our national debts, it does leave Contractors who work outside of the safety net of a large corporate employer, dangerously exposed to the damage that illness or injury can do to your finances.
It was announced last week that sickness benefits would be limited to twelve months for anyone that is not incapable of any type of work. This could see Contractors that need to claim sickness benefits because they have been injured or are suffering from a long term illness, forced into a manual job after just twelve months of claiming benefits.
As the Contractor specialist IFA we are all too aware of harsh realities that face Contractors if you fall ill or are injured and are unable to work. We have lost count of the number of cases where Contractors have suffered a loss of income because they were too ill to get on site and if you don’t have any savings to fall back on then this can have a significant and potentially ruinous impact on your finances. This rings particularly true now that the Government have cut back on benefits.
What can you do?
To protect against this, Contractors need to insure against illness or injury with a Contractor income protection product. So called Permanent Health Insurance (PHI) can offer you long term protection if you are unable to work due to sickness or injury. There is a wide variety of policies available to Freelancers including insurance that will continue to pay up to 75% of your income until your chosen retirement age if you never recover. We advise our highly skilled Contractor clients to opt for an insurance that properly covers you on an ‘own occupation’ basis which will prevent you having to stack supermarket shelves if you are deemed well enough to do a manual role but can’t return to contracting.
First two months cover free!
We can even offer a ‘one day cover’ which will immediately protect against short term illness or injury such as a cold or flu without the normal waiting period of 4-8 weeks.
Thanks to our influence with insurers we have been to negotiate an exclusive offer that allows you to access the first two months free insurance on this protection. There is no obligation to keep the policy after the two months is over but we’re confident that you’ll appreciate the value of this protection for the time that you are contracting.