We aim to make our website as accessible as possible. However if you use a screen reader and require debt advice you may find it easier to phone us instead. Our phone number is 0 8 0 0 1 3 8 1 1 1 1. Freephone (including all mobiles).
StepChange Debt Charity logo
Go

Dealing with debt and long term sickness

When you’re living with an illness or you’re on long-term sick leave it can be challenging both mentally and physically. It’s likely that your financial situation may be affected which can often lead to stress.

If you have ongoing health issues it can often mean you have to deal with unpredictable expenses such as traveling to healthcare appointments, hospital parking, and prescription charges which can increase your essential living costs. Added to this, if your illness makes it difficult to work, your income may be reduced.

These financial pressures can make falling into debt more likely, or lead to debts you could once deal with becoming unmanageable.

Look at your financial situation

There are some steps you can take to help manage your finances so you can concentrate more on your health and less on money worries.

Firstly, you should prepare a budget. It’s important that your essential living expenses and care costs have been taken into account before working out how to deal with your debts.

Try Debt Remedy

Free online debt advice in 20 mins

Get debt help

Increase your income

It should be a priority to make sure that you’ve got as much money coming in as possible. You should double check all of your entitlements and benefits, as well as any pensions, savings or investments you might have.

Support from your employer during long term sick leave

If you’re ill you may need to take some time off for appointments, to recover or to cope with the stress you’re experiencing. Your employer should take steps to support you during and after your treatment, and make reasonable adjustments so that you’re not put at a disadvantage because of your illness.

Statutory Sick Pay: What is it?

You can get Statutory Sick Pay (SSP) from your employer for up to 28 weeks. You must fit the following criteria:

  • You are in work, but unable to attend due to illness
  • You were earning £112 per week or more in the two months before you were unable to work

Some employers operate their own sick pay schemes, so you should contact your HR department if there’s one, ask a manager, or check your contract or handbook.

SSP payments are paid into your bank account in the same way as your employer pays your usual wages and on the same basis i.e. weekly or monthly. The statutory entitlement is £88.45 per week and will be paid by your employer for up to 28 weeks.

Are you a carer?

If you’re a caring for someone with long term illness, you also have rights at work. You’re entitled to a reasonable amount of unpaid time off work to provide support in an emergency, and to request flexible working hours.

If you need impartial advice on your rights at work, speak to your trade union rep, or if you don’t have one contact the Acas helpline.

Claim an income tax refund

If you’ve had to stop working due to long-term illness or work reduced hours you may be entitled to a refund of some of the income tax you’ve paid that year. This is called a tax rebate, and you should contact HMRC to check if you’re entitled to one.

Check your State benefit entitlements

If you’re unable to work or have a low income as a result of having a long term illness, or you’re caring for someone who does, there are a range of benefits available to help. Use our benefits calculator to check your entitlement.

Apply for grants and loans

Some charities, such as Macmillan, offer small grants to help people with the costs of living with cancer. Turn 2 Us offer a grant search service to help you check if there are any charities or funds who may be able to help with one-off costs.

Local councils sometimes offer grants or other financial or practical support if you’re living with illness. Contact the social services department at your local council to find out what they offer.

Check your insurance policies

Check whether you have insurance policies that pay out in the event of long-term or terminal illness. These might include:

  • Some life insurance policies will pay out if you have been diagnosed with a terminal illness
  • You may have mortgage payment protection that covers your mortgage payments if you are unable to work
  • Check to see if you have critical illness cover that gives you a lump sum or regular payments
  • You might have income protection insurance that gives you an income in the event that you’re unable to work

Bear in mind that any insurance pay-out could affect state benefit claims you make.

Look at your pensions, savings, or investments

If you’re of pension age, you’ll already receive the state pension. If you have a low income you may also claim an additional benefit called Pension Credit to help you.

If you have a private pension, you may be able to withdraw a portion of it. You’ll need to contact your pension provider.

If you have savings or investments set aside to cover the unexpected, now may be a good time to use them.

Before you consider drawing money from your pension savings, it’s important to think about how it’ll affect you income in the future. We recommend contacting Pension Wise for impartial information on your options. Alternatively, you could contact an independent financial adviser.

Reduce your spending

You should examine your essential living costs such as housing, food and travel, and see where you can reduce your spending.

Rent and mortgages

If you’re renting and are on a low income you may be able to claim housing benefit, and also reduce your council tax bill by applying for a discount.

If you have a mortgage, contact your mortgage lender or insurer to see if you have insurance in place which covers your payments in the event of you being ill.

There’s also a government benefit available called ‘Support for Mortgage Interest’. To qualify you must be receiving one of the following:

  • Income support
  • Jobseeker’s allowance
  • Employment and support allowance
  • Pension credit
  • Universal credit

Contact Job Centre Plus, the Pension service, or the Universal Credit helpline to claim.

Utility bills

Contact your gas, electricity and water suppliers and explain your situation. They may be able to offer you extra support, including free annual safety checks, emergency call out priority and protection from being cut off if you fall into arrears.

You may be able to save money by switching your energy suppliers, or by moving to a Direct Debit. You could also be eligible for the warm homes discount or the winter fuel payment.

Travel and parking

Getting around, including travelling to and from hospitals, and parking, can put extra strain on your finances when you’re ill. Some hospitals offer schemes to help you with the costs. Speak to yours to see what support they have available.

If you have reduced mobility you may also qualify for a Blue Badge which lets you park free of charge in many car parks and on-street parking bays. All over 60s also qualify for a free bus pass so make sure you apply for this if you’re entitled to it.

Prescriptions and health costs

In Scotland, Wales and Northern Ireland all prescriptions are free of charge for all NHS patients.

In England, there’s usually a fee of £8.40 per prescription, except for cancer patients. They’re exempt from the charge. You can apply for the exemption certificate by collecting an FP92A form from your GP. You can also apply for help with other costs through the NHS Help with Health Costs scheme.

Getting a friend or relative to help

If you’re worried about the deterioration of your health, and are likely to lose the capacity to manage your finances, you can nominate a third party to look after your affairs, called power of attorney.

The person who is giving the power of attorney is known as the donor and the person who is granted the power is known as the attorney. The government offers an online service to creating a lasting power of attorney.

If you need help completing the forms you can call the Office of the Public Guardian on 0300 456 0300. Age UK also offers support and advice about the process if you’re elderly.

Getting help with your debts

If you’re struggling to pay your household bills and have a long-term illness, use our online Debt Remedy tool or contact us for advice and practical solutions to deal with your debt.

We’ll look at your finances in detail, give you free and impartial debt advice, and recommend a debt solution tailored to your situation.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2017