Statutory sick pay: Campaigners call for reforms to prevent workers from being pushed into poverty

Published

2 years ago

May 13, 2023

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For all its seaside delights, Margate in Kent is one of the most deprived parts of the UK. Amid the cost of living crisis, many families are struggling to make ends meet.

Falling ill can become a headlong plunge into poverty – as Kyra Lloyd, a 25-year-old shop assistant, discovered when she began experiencing agonising pain in her ankle and she was left unable to stand.

“I started getting some very horrible, horrible pains. My foot was completely swollen, I couldn’t move.”

Doctors told Kyra the metalwork holding her bones together since a childhood fracture had snapped – and without surgery she could end up permanently in a wheelchair.

During the long wait for treatment she was signed off work. But statutory sick pay barely covered half her rent – let alone any other living expenses.

“I’m in so much debt now because of it,” she says.

“I have about £3,000 in debt from borrowing from people and getting loans because I just couldn’t afford to live. I couldn’t pay my rent. It’s just not enough.

“It’s embarrassing to ask people when you can’t even afford to eat.

“I ended up having just gravy and bread for dinner because I just couldn’t afford it – the question was do I have a roof over my head or food? No one should have to choose.

“Even things like washing your clothes… I was having to wash them in the bath at one point because I just couldn’t afford to use that much electricity. It’s so difficult. It’s not right.”

Kyra has now recovered and has a new job, but she’s constantly worried about the pain coming back.

“Every time I feel a slight twinge in my foot, I think – I can’t afford to go back on sick pay, I can’t afford another surgery. It’s a huge stress.”

Christopher Balmont, 57, has been working as a head chef in a restaurant for more than a decade. His partner is unable to work as she cares for their daughter, who has special educational needs.

Earlier this week, he was signed off work with depression and anxiety. Statutory sick pay will only cover a quarter of his normal income – and the stress of how to pay the bills is making his condition worse.

“I don’t sleep, I feel anxious most of the time, and this makes me even more anxious,” he says.

“I’m worried about the whole situation and the amount you get. I would have thought it would be more. I haven’t had to claim it before, so it’s just a bit of a shock. And I had no choice. If I had a choice I’d be at work.

“It’s not just me that’s suffering from my illness, it’s my family as well.”

While around half of workers are offered more generous levels of sick pay by their employers, a third are only entitled to the legal minimum.

What is statutory sick pay and how does it work?

Statutory sick pay is currently £109.40 a week, which works out at around a third of the minimum wage.

It is only paid from the fourth consecutive day of illness – during COVID this was temporarily changed so workers were entitled to support from day one, but that stopped last year.

Your employer does not have to pay if your average weekly earnings are less than £123 a week.

This means two million of the country’s lowest paid workers receive no sick pay at all – a situation which particularly affects those in jobs like cleaning, caring and security where zero-hours contracts are common and staff often work shifts for multiple employers. Self-employed people are not covered either.

In 2019, the government pledged to improve and expand statutory sick pay to cover all low-paid workers for the first time.

The idea was strongly supported in the resulting public consultation, with 75% of respondents in favour, including large and small employers. But during the pandemic that promise was abandoned.

Research on minimum income standards

Matt Padley, from Loughborough University’s centre for research in social policy, has calculated the impact of falling ill and relying on statutory sick pay in the light of his research on minimum income standards.

He and his team produce the annual minimum income standard calculation, which determines the weekly budget needed by households to maintain a socially acceptable standard of living in the UK.

For a single person living outside London that figure in 2022 was £489.20 a week.

Under statutory sick pay, a worker’s earnings are less than 25% of what they would need just to meet that minimum standard.

In the first week of illness, when payment only begins from the fourth day, that figure is 10%.

Within a month, a single adult previously on average earnings of £630 a week would face a shortfall of £1,230 – in three months, it’s £3,862.

“Without any other support from the state, all workers receiving statutory sick pay or no sick pay would fall well short of what they need for a minimum socially acceptable standard of living,” Mr Padley says.

That equates to more than 12 million people.

People are being forced onto benefits system

The campaign group Safe Sick Pay, a coalition of charities and trade unions, is calling for statutory sick pay to be increased in line with the minimum wage, for all employees to be covered, and for payments to begin on the first day of illness.

“Currently if these workers fall sick, they either have to go into work sick – making their condition worse and potentially infecting other people – or they stay at home and do the right thing, but then they’re left unable to pay the bills,” says campaign director Amanda Walters.

She argues low rates of statutory sick pay are forcing people onto the benefits system – as levels of support are significantly higher.

“If you fall sick and you only get the legal minimum sick pay then very quickly you’re going to fall out of the workforce, going onto benefits and to universal credit. And the longer you’re on universal credit, the harder it is to get back into the workforce.

“That is why we want to see a link between those that are sick and their employer not pushing them onto universal credit.

“A lot of these people want to remain in work. They don’t want to go onto universal credit. And at the moment, the current system is costing the taxpayer £55bn.”

‘Sick pay reform is overdue’

Encouraging people to return to employment after a period of long-term sickness was a key priority of the chancellor’s “Back to Work” budget in March.

But statutory sick pay was not mentioned, and some senior Tories, including former cabinet minister Sir Robert Buckland, argue sick pay reform has to be part of the strategy.

“Now’s the time for action,” he says.

“We’re talking about hundreds of thousands of people who, through no fault of their own, might get ill and who end up staying off work for longer because of the disincentives that are caused at the moment by the lack of reach of statutory sick pay.

“We need a range of measures to combat economic inactivity and lack of productivity. And it seems to me that a reform to stop sick pay is overdue.

‘A win-win for employers’

“It’s not just a compassionate move, it’s a common-sense move. It’s a pro-business move. It’s a productivity enhancing move.

“It’s a win-win for employers, because at the moment there’s a disincentive to even announce any illness at all, and that can lead to further problems down the line. And very often longer-term absence is disastrous for small employers who really get hit hard by that.”

A Department for Work and Pensions spokesperson said the government has a “strong track record” of getting people off benefits and back into work, and that the number of people who are economically inactive is going down.

“We are implementing a range of initiatives supporting disabled people and people with health conditions not just to start, but to stay and succeed in work,” they added.

Business

£5bn Bitcoin fraud mastermind had device containing £67m in secret pocket

Published

9 hours ago

October 15, 2025

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£5bn Bitcoin fraud mastermind had device containing £67m in secret pocket

The mastermind of a £5bn Chinese investment fraud was found with a device containing £67m of cryptocurrency in a secret pocket of her jogging bottoms when she was arrested after years on the run, a court has heard.

Prosecutors are setting up a compensation scheme after Yadi Zhang, 47, conned around 128,000 Chinese investors into fraudulent wealth schemes between 2014 and 2017.

Zhang, who is also known as Zhimin Qian, admitted money laundering charges after police discovered more than 61,000 Bitcoin, now worth more than £5bn, in digital wallets, in the UK’s biggest ever cryptocurrency seizure.

She arrived in the UK on a false St Kitts and Nevis passport in September 2017 before coming to the attention of police after trying to buy some of London’s most expensive properties.

Zhang vanished after police raided her £5m six-bedroom rented house near Hampstead Heath in north London in 2018, but was finally arrested in York last year.

In written legal arguments, Martin Evans KC representing the Director of Public Prosecutions Stephen Parkinson, said a ledger and passwords were found in a purpose-made concealed pocket in the jogging bottoms she was wearing.

She revealed the access code for two wallets during interviews in prison, leading investigators to cryptocurrency worth around £67m.

The stash has been added to the £5bn Bitcoin hoard, which has reportedly been earmarked by Chancellor Rachel Reeves to help plug the hole in the public finances.

The fortune is at the centre of a High Court battle between the UK government and thousands of Chinese victims, who want to recover their investment and say it should reflect the huge rise in the value of Bitcoin.

Law firm Fieldfisher, which is representing around 1,000 victims, said some have lost their life savings and many are old and vulnerable.

The court heard the DPP is also setting up a compensation scheme for the victims not represented in court, although no further details have been given.

The judge, Mr Justice Turner, will make orders on the case at a later date.

Zhang pleaded guilty to charges of possessing criminal property and transferring criminal property on or before the 23 April 2024 last month and is in custody awaiting sentencing in November.

Jian Wen, 43, was jailed for six years and eight months last year after being found guilty of one count of money laundering between October 2017 and January 2022 relating to 150 Bitcoin, now worth around £12.5m.

Her trial heard that Wen, who previously worked in a Chinese takeaway, was not involved in the alleged fraud but acted as a “front person” to help disguise the source of the money.

The court heard how the two women travelled the world, spending tens of thousands of pounds on designer clothes, jewellery and shoes.

Seng Hok Ling, 47, is said to have replaced Wen as Zhang’s “butler”, organising helpers and booking Airbnbs, including in Scotland, for the fugitive while she was on the run.

Police found Zhang after carrying out surveillance of Ling and seized assets including encrypted devices, cash, gold and cryptocurrency.

Ling, a Malaysian national from Matlock in Derbyshire, pleaded guilty at Southwark Crown Court to entering into a money laundering arrangement with Zhang on or before 23 April 2024 and will be sentenced alongside her.

Prosecutors said Zhang masterminded a scam in China, before converting the money into cryptocurrency to get it out of the country.

Business

PPE Medpro will be pursued ‘with everything we’ve got’ Wes Streeting says

Published

9 hours ago

October 15, 2025

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PPE Medpro will be pursued 'with everything we've got' Wes Streeting says

The Government has vowed to pursue a company linked to Baroness Michelle Mone for millions of pounds paid for defective PPE at the height of the COVID pandemic after a High Court deadline passed without repayment.

Earlier this month, the High Court ruled that PPE Medpro, a company founded by Baroness Mone’s husband Doug Barrowman and promoted in government by the Tory peer, was in breach of contract and gave it two weeks to repay the £122m plus interest of £23m.

In a statement, the Health Secretary Wes Streeting said: “At a time of national crisis, PPE Medpro sold the previous government substandard kit and pocketed taxpayers’ hard-earned cash.

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“PPE Medpro has failed to meet the deadline to pay – they still owe us over £145m, with interest now accruing daily.”

It is understood that is being charged at a rate of 8%.

“We will pursue PPE Medpro with everything we’ve got to get these funds back where they belong – in our NHS,” Mr Streeting concluded.

Earlier a spokesman for Mr Barrowman and the consortium behind the company said the government had not responded to an offer from PPE Medpro to discuss a settlement.

“Very disappointingly, the government has made no effort to respond or seek to enter into discussions,” he said.

During the trial PPE Medpro offered to pay £23m to settle the case but was rejected by the Department of Health and Social Care.

While Mr Barrowman has described himself as the “ultimate beneficial owner” of PPE Medpro, and says £29m of profit from the deal was paid into a trust benefitting his family including Baroness Mone and her children, he was never a director and the couple are not personally liable for the money.

PPE Medpro filed for insolvency the day before Mrs Justice Cockerill’s finding of breach of contract was published, and the company’s most recent accounts show assets of just £666,000.

Court-appointed administrators will now be responsible for recovering as much money as possible on behalf of creditors, principally the DHSC.

With PPE Medpro in administration and potentially limited avenues to recover funds, there is a risk that the government may recover nothing while incurring further legal expenses.

In June 2020, PPE Medpro won contracts worth a total of £203m to provide 210m masks and 25m surgical gowns after Baroness Mone contacted ministers including Michael Gove on the company’s behalf.

While the £81m mask contract was fulfilled the gowns were rejected for failing sterility standards, and in 2022 the DHSC sued. Earlier this month Mrs Justice Cockerill ruled that PPE Medpro was in breach of contract and liable to repay the full amount.

Mr Barrowman has previously named several other companies as part of the gown supply including two registered in the UK, and last week his spokesman said there was a “strong case” for the administrator to pursue them for the money.

One of the companies named has denied any connection to PPE Medpro and two others have not responded to requests for comment.

Insolvency experts say that administrators and creditors, in this case the government, may have some recourse to pursue individuals and entities beyond the liable company, but any process is likely to be lengthy and expensive.

Julie Palmer, a partner at Begbies Traynor, told Sky News: “The administrators will want to look at what’s happened to what look like significant profits made on these contracts.

“If I was looking at this I would want to establish the exact timeline, at what point were the profits taken out.

“They may also want to consider whether there is a claim for wrongful trading, because that effectively pierces the corporate veil of protection of a limited company, and can allow proceedings against company officers personally.

“The net of a director can also be expanded to shadow directors, people sitting in the background quite clearly with a degree of control of the management of the company, in which case some claims may rest against them.”

A spokesman for Forvis Mazars, one of the joint administrators of PPE Medpro, did not comment other than to confirm the firm’s appointment.

Business

Royal Mail fined millions for failing to meet delivery targets again

Published

21 hours ago

October 15, 2025

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Royal Mail fined millions for failing to meet delivery targets again

Royal Mail has been fined £21m for failing to meet delivery targets for the third year in a row and warned fines are likely to continue unless there’s an improvement.

As well as failing to meet current delivery times for both first and second class mail, Royal Mail did not meet revised down targets agreed with Ofcom.

The delivery network delivered 77% of first class mail and 92.5% of second-class mail on time from April 2024 to March this year, “well short” of its 93% and 98.5% targets, the communications regulator said.

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It’s also below the reduced goals which were set out for the delivery company at the start of the year – bringing down the percentage of first class post delivered the next day from 93% to 90%, and second class mail delivered within three days from 98.5% to 95%.

The latest fine is double that levied last year, £10.5m, and nearly quadruple the £5.6m fine in 2023 because of the repeat offending.

It’s the third-largest fine ever levied by Ofcom and would have been higher, £30m, but for Royal Mail’s admission of wrongdoing and agreement to settle.

Millions not getting what they pay for

Royal Mail has, without justification, failed to provide an acceptable level of service and breached its obligations, Ofcom said.

“It took insufficient and ineffective steps to try and prevent this failure, which is likely to have impacted millions of customers who did not get the service they paid for.”

People have also been experiencing times when letters have taken weeks to arrive.

Ian Strawhorne, director of enforcement at Ofcom, said: “Millions of important letters are arriving late, and people aren’t getting what they pay for when they buy a stamp.

“These persistent failures are unacceptable, and customers expect and deserve better.

“Royal Mail must rebuild consumers’ confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises.”

Real world harms

In highlighting the real-life consequences of the delivery delays, Citizens Advice said it had encountered someone who got a pile of mail with their council tax bill, a court summons for a passed court hearing date and a liability order for the debt, all at the same time.

Another client of the service was sent an eviction notice, which had not arrived more than a week after a copy came from the landlord’s solicitors.

They were unsure if the warrant would arrive by the time the bailiffs came and were unsure how to act, Citizens Advice said.

What next?

Royal Mail has been ordered by Ofcom to urgently and publicly set out and implement a “credible plan” on how it is going to change.

The regulator said it expects to see “meaningful progress soon”, rather than “more empty promises”.

Improvements Ofcom had pressed for have not materialised, it said, and Royal Mail has been called on to make “actual significant improvements”.

“If this doesn’t happen, fines are likely to continue,” the regulator warned.

Ofcom said the “persistent failures” are unacceptable, and customers expect and deserve better.

“Royal Mail must rebuild consumers’ confidence as a matter of urgency,” it added.

The company has also been set a new enforceable target for 99% of mail to be delivered no more than two days late.

How has Royal Mail responded?

A Royal Mail spokesperson said: “We acknowledge the decision made by Ofcom today and we will continue to work hard to deliver further sustained improvements to our quality of service.”

The company has implemented “important changes across our network including recruiting, retaining and training our people, and providing additional support to delivery offices”, they said.

“Where we have piloted universal service changes, we can see that our model is working, with improvements in deliveries,” the spokesperson added.