Statutory sick pay: Campaigners call for reforms to prevent workers from being pushed into poverty
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.”
Statutory sick pay will only cover a quarter of Christopher Balmont’s normal income
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.”
Read More:
Call for more help to get millions of long-term sick back into employment
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.
Sir Robert Buckland is calling for sick pay reform
“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.
Inflation has risen by more than expected due to an increase in energy bills, official figures showed.
It’s the first rise in the rate of price increases, as measured by the consumer prices index (CPI), for three months.
The figure stood at 2.3% in October, according to the Office for National Statistics (ONS), above the 2.2% forecast by economists.
This is also a sizeable increase on the 1.7% recorded a month earlier.
Money blog: Follow live reaction to inflation news
Household gas and electricity bills rose last month as the energy price cap brought the cost of a typical annual bill up to an extra £12 a month.
Inflation wasn’t higher because there were falls in live music and theatre ticket prices and continued drops in raw materials due to cheaper oil.
What about interest rates?
Today’s data may affect the likelihood of the Bank of England cutting interest rates next month.
Before the inflation figure was announced, there was a 78.3% chance of no change – and a 21.7% chance that the cost of borrowing would fall by 0.25 percentage points.
After the announcement that changed to 84% chance of no cut.
Also on the up was another important measure of inflation watched by the Bank – core inflation, which measures price rises but excludes food and energy costs as they’re liable to sharply fall or rise.
Core rose to 3.3%, more than the forecast 3.1% expected by economists polled by Reuters.
Services inflation also came in above forecast and higher than a month ago at 5%.
Political reaction
Responding to the figures the chief secretary to the treasury, Darren Jones, said:
“We know that families across Britain are still struggling with the cost of living. That is why the budget last month focused on fixing the foundation of our economy so we can deliver change.”
“But we know there is more to do. That is why the government is focused on economic growth and investment so we can make every part of the country better off.”
The shadow chancellor Mel Stride said:
“It’s higher inflation and lower growth under Labour.”
“What is worrying about today’s announcement is that inflation is running ahead of expectations and official forecasts state these figures are not expected to improve. Labour’s budget will push up inflation and mortgage rates.”
A woman casually walks into a convenience store and starts filling a bread crate with goods from one of the aisles.
A shop assistant tries to stop her, but she shrugs him off, undeterred. With the crate now full of items, she leaves without paying.
It is a scenario that is played out day in and day out across Britain, as retailers warn the surge in shoplifting is now “out of control”.
Four in five store owners told Sky News they’ve experienced shoplifting in just one week
I’m sitting in the security office of a busy city centre shop and I’m watching as a schoolboy walks in and helps himself to a sandwich, stuffing it into his jacket.
Watching with me is shop worker Anton Mavroianu who positions himself by the main entrance waiting for the youngster to leave.
When the boy does leave, Anton demands the item back. Instead of being frozen with fear that he’s been caught, the boy laughs and walks off.
“All we can do is try to stop them,” Anton tells me. “But this is just another day for us.”
Anton Mavroianu said he has been threatened with a knife while trying to stop shoplifters
A few weeks earlier, when Anton tried to stop a shoplifter who had stolen from the store, the man pulled out a knife and tried to attack him.
This terrifying incident is an example of the very real threat posed to shop workers as they try to stem the tide of brazen thefts.
Shoplifting offences recorded by police in England and Wales have risen to the highest level in 20 years.
The British Retail Consortium (BRC) also reports that theft-related losses cost the retail sector millions each year, adding strain to an industry already grappling with post-pandemic recovery and economic uncertainty.
For small businesses, which lack the resources of larger chains, persistent theft can threaten their very survival.
Read more on shoplifting:
Why legion of shoplifters is causing an explosion in crime
Theft and fraud costs Co-op nearly £40m in just 6 months
Ricky Dougall owns a chain of convenience stores and says shoplifting cost his business around £100,000 last year.
“Shoplifting is a huge problem and it is what stops us from growing the business.
“People come in and help themselves like they own the place and when you call the police, most of the time, they don’t turn up.”
Ricky Dougall said part of the problem is how shoplifting is classified during sentencing
Mr Dougall says part of the problem is how this type of crime is classified.
Sentencing guidelines for thefts of under £200, so-called “low level shoplifting”, were relaxed in 2016. That is being blamed for the surge in cases.
An exclusive Sky News and Association of Convenience Stores survey shows that 80% of shopkeepers reported a retail crime within a week in October.
The poll also found 94% of shopkeepers say that in their experience, shoplifting has got worse over the last year, with 83% not confident that the police will take action against the perpetrators of retail crime on their premises.
Paul Cheema from the Association of Convenience Stores says retailers are looking to government to support them.
“I would say officials do not give a s*** about us retailers,” he tells me. “The losses are too big and I don’t think we can sustain that anymore.
“I would urge Keir Starmer to come and meet us and see up close the challenges that we are facing.”
Retailers have responded by investing heavily in security measures, from advanced surveillance systems to hiring more security staff.
But these investments come at a cost, often passed down to consumers through higher prices.
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I get chatting to Matt Roberts, head of retail in the store I am in. He worries about shoplifting, but he worries about the staff more.
He says: “I would imagine they dread coming to work because they’re always on tenterhooks wondering whether something is going to happen today, whether they are going to have to try and confront someone.
“It’s a horrible feeling. It’s out of control and we need help.”
Matt Roberts says he is concerned for his staff, who have to confront shoplifters
The government has acknowledged the urgency of the issue. Home secretary-led discussions with retail associations and law enforcement are under way to craft a comprehensive strategy.
In the King’s Speech, the government outlined details of a Crime and Policing Bill, which promised to “introduce stronger measures to tackle low level shoplifting”, as well as introducing a separate offence for assaulting a shop worker.
Inflation jumped to 2.3% in October – a six-month high.
A rise in household energy bills contributed to the higher-than-expected reading.
Economists had forecast a figure to 2.2% after a three-year low of 1.7% in September.
But how does all of this affect the cost of groceries, clothing and leisure activities? Use our calculator to find out.
Which prices are increasing fastest?
Unlike previous months, the item with the largest price increase was a non-food product: hair gel. Its price rose from £3.18 to £4.07, a jump of nearly 30% in just 12 months.
Olive oil also rose by close to 30%, with prices for 500ml to one litre rising from £7.16 to £9.16.
Experts have put that price rise down primarily to poor olive yields due to last year’s heatwaves in southern Europe.
However, they expect a significantly better harvest in the 2024-25 season, thanks to significant rainfall in Spain. The harvest could be double the size of last year’s, which may lead to lower prices in the coming months.
Food and drink products are responsible for eight of the 10 biggest increases since last year.
Top five price rises:
• Hair gel (150 to 200ml): up 28%, £3.18 to £4.07
• Olive oil (500ml to one litre): up 28%, £7.16 to £9.16
• Carrots (per kg): up 28%, 65p to 83p
• Iceberg lettuce (each): up 23%, 79p to 97p
• White potatoes (per kg): up 19%, 75p to 89p
Overall, 47 of the 156 types of food and drink tracked by the ONS have actually become cheaper since last year.
There’s good news for fans of a prawn cocktail: frozen prawns and mayonnaise are among the top 10 foods with the largest price decreases.
Overall, 147 out of the 444 products in our database are cheaper than they were 12 months ago.
Top food price decreases:
• Pulses (390g to 420g): down 11%, 76p to 68p
• Frozen prawns (per kg): down 9%, £19.04 to £17.42
• Mayonnaise (390g to 500g/420ml to 540ml): down 7%, £2.20 to £2.04
• Pre-prepared mashed potatoes (400g to 650g): down 7%, £1.12 to £1.04
• Canned tomatoes (390g to 400g): down 7%, 71p to 66p
Of non-supermarket items, kerosene has been the biggest price faller – by a quarter.
What is the effect of long-term inflation?
The price changes described above compare the cost of items to where they were a year ago.
However, inflation has now been at high levels for an extended period of time.
The war in Ukraine, COVID, Brexit, and other supply chain pressures have all contributed to spiralling costs in recent years.
Inflation reached a 40-year high of 11.1% in October 2022.
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While the headline inflation figure has come down markedly, any amount of inflation means that prices are still rising, and building on already inflated costs.
We’ve compared the costs of shopping items with what they were three years ago to see what the cumulative impact of inflation has been.
The biggest price rise for groceries over that time has been for olive oil (500ml to one litre), which has increased nearly two-and-a-half times (146%), from £3.72 to £9.16 in the past three years.
Iceberg lettuce is up by four-fifths, with one costing 97p now compared with 54p in October 2021.
Use our calculator to see how much prices in your shopping basket have risen in total since three years ago.
Who is worst affected?
Richard Lim, chief executive of Retail Economics, says: “It’s the least affluent households that are going to see much higher rates of inflation as they spend more of their income on food and energy.”
We’ll continue to update our spending calculator over the coming months so you can see how you’ll be affected.
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Methodology
The ONS collects these prices by visiting thousands of shops across the country and noting down the prices of specific items. There are upwards of 100,000 prices published every month, from more than 600 products.
The items that form the “official shopping basket” change each year to reflect how the purchasing habits of the population have changed. For example in March 2021, after a year of the pandemic, hand gel, loungewear bottoms and dumbbells were added, while canteen-bought sandwiches were among the items removed.
Where there aren’t the exact equivalent items available at a survey shop, ONS officials pick the best alternative and note that they’ve done this so it’s weighted correctly when the averages are worked out.
Shops are weighted as well, so the price in a major chain supermarket will have a greater impact on the average than an independent corner shop.
We will be updating these figures each month while the cost of living crisis continues.
During the pandemic, more of the survey was carried out over the phone and work is ongoing to digitise the system to be able to take in more price points by getting data from supermarket receipts, rather than making personal visits.
Data journalists: Daniel Dunford, Amy Borrett, Ben van der Merwe, Joely Santa Cruz and Saywah Mahmood
Interactive: Ganesh Rao
Design: Phoebe Rowe, Brian Gillingham
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open-source information. Through multimedia storytelling, we aim to better explain the world while also showing how our journalism is done.
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