Ill health is crippling financial resilience across the UK’s economy. But advice and wisdom from a financial expert and a well-rounded 91-year-old entrepreneur offer a solution to this growing problem
New figures paint a concerning picture, revealing a stark disparity between the financial security of those in good health compared to those struggling with illness. This isn’t just a personal tragedy; it has broader societal implications, impacting families, the workforce, and the economy.
The latest data from the HL Savings & Resilience Barometer (January 2025) reveals the devastating impact of poor health on household finances. Individuals in poor health are drastically less likely to have sufficient emergency savings (28%) compared to their healthy counterparts (70%). The difference in disposable income is equally alarming, with those in poor health having a mere £21 left at the end of the month, compared to £234 for those in good health. Only 9% of households struggling with health issues have enough cash reserves to be considered financially resilient, a stark contrast to the 46% resilience rate among healthy households.
Just how big of a problem is ill health in the UK?
Sarah Coles, head of personal finance at Hargreaves Lansdown, emphasises the scale of the problem: “Over 3 million people aren’t working right now because their health isn’t up to it, and this could lie in anyone’s future. Sickness – particularly over the long term – can be devastating for your finances, and once it strikes, there’s very little you can do about it. It means we need to take stock now, and protect ourselves from the financial fallout of falling ill.”
The impact extends beyond the individual. Coles highlights the ripple effect on families: “It’s not just the sick person who pays the price, because there’s the risk their loved ones will need to take on caring responsibilities that could make it harder for them to work too.” This is reflected in the income disparity revealed by the Barometer, showing households headed by someone in poor health have significantly lower incomes (£20,175) than those in good health (£43,880).
The challenge is compounded by a “catch-22” situation, as Coles explains: “If your health is poor, you’re more likely to need to fall back on sick pay or income protection… However, if you’re too sick to find work, you can’t get sick pay. Similarly, if you’re suffering from a long-term condition, it can be incredibly difficult to get affordable insurance cover.” This is borne out by the figures, with only 26% of those in poor health having adequate cover, compared to 84% of those in good health.
The Office for National Statistics (ONS) data underscores the urgency of the situation, revealing a decline in healthy life expectancy. In 2021 to 2023, men are only expected to live 61.5 years in good health, and women 61.9 years – a decrease since before the pandemic. Furthermore, ONS figures from November 2024 show 215,000 people off work due to temporary illness, and a staggering 2,813,000 suffering from long-term sickness.
What can be done about money before you get sick?
Coles advises proactive planning: “Once you develop a condition, it becomes much harder to protect your financial resilience, so it makes sense to consider how you would cope financially if your health deteriorated. This means thinking about emergency savings.”
She recommends aiming for 3-6 months’ worth of essential expenditure in an easily accessible account, suggesting a rough ballpark figure of £2,000 per month for an average household. Coles also stresses the importance of maximising interest on savings, checking things like employer sick leave if you are hired by a recruitment agency or umbrella company and income protection policies, and revisiting pension contributions.
The power of purpose on your health
While financial planning is crucial, the importance of purpose and engagement in maintaining well-being shouldn’t be underestimated. Dame Stephanie “Stevie” Shirley, a WWII child refugee and UK software engineer turned entrepreneur, in her reflections on health and purpose offers a different perspective.
While acknowledging the importance of healthy habits, such as swimming laps each day, the 91-year-old emphasises the role of work and purpose:
I believe the real reason I feel good at my age is that I have never stopped working. Having something worthwhile to get up for each morning makes all the difference.
Shirley’s continued engagement in various projects, from speaking engagements supporting charities like Autistica and Safe Passage, to contributing to films and articles, highlights the positive impact of meaningful activity. Even her involvement in local initiatives, like the Henley Toad Patrol, demonstrates the value of contributing to something larger than oneself.
Purpose doesn’t always have to be grand. Sometimes, it’s simply about looking out for the world around us—even its smallest inhabitants. Each year from February to April, volunteers in Henley take part in the Toad Patrol, helping frogs, toads, and newts cross the busy Marlow Road during migration. If you’ve ever wondered about those clanking buckets and twinkling torchlights at night, now you know. I do so love the British eccentricity.
–Dame Stephanie “Stevie” Shirley
What can freelancers learn from this?
Financial experts and personal experiences from highly active entrepreneurs in later life highlight the multifaceted nature of well-being. While financial resilience is paramount, a sense of purpose and continued engagement, as championed by Dame Stephanie Shirley, can play a vital role in maintaining health and overall quality of life.
Addressing the challenge of sickness and financial vulnerability requires a holistic approach, encompassing both financial planning and getting involved in something you find meaningful throughout your personal and working life.
Will a holistic approach guarantee you won’t get a critical illness? No. But it should decrease your chances of getting seriously ill and provide you with a greater wealth of memories with fewer regrets.
Are you a freelancer or business owner with an inspiring story to share?
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