The case for increasing Statutory Sick Pay in the UK

Trade union leaders have supported calls to reform Statutory Sick Pay (SSP) in the UK. The current SSP rate is £116.75 per week (increasing to £118.75 in April 2025), leaving many employees struggling financially when they are struck by illness or injury.

The current state of statutory sick pay (SSP) in the UK

The current SSP system in the UK has been criticised for the three-day waiting period before an employee is eligible for sick pay and the eye-watering low rate that barely covers the average person’s regular earnings.

As it stands, the earning threshold to be eligible for SSP is £123 per week, and the government will begin consultation on reforms to this as of 2025. There are hopes to lower this threshold and introduce a percentage replacement rate, but no changes will occur until at least April 2026, giving many low-income earners another year and a half under the existing system that disproportionately affects them.

What changes to statutory sick pay could mean for SMEs

Under the proposed reforms, small and medium-sized businesses (SMEs) are likely to experience substantial increases in SSP and would be expected to contribute 60% of any additional costs. The unintended consequence could be a slowing in the number of new jobs provided by SMEs and even the disappearance of existing jobs altogether.

Expert recommendations

Eligibility from day one: To address worries about income delays during acute illness, the Department for Work and Pensions suggests making SSP available from the first day of illness.

Supporting staff long-term: The Work Foundation has stated that it’s vital for employers to create programs that support employees with chronic health conditions, making sure they stay valuable and productive.

Increase SSP Rates: CIPP advises maintaining the current waiting period while raising SSP rates to offer more support for vulnerable employees.

Key takeaways

As the UK is in the midst of a participation crisis, and health matters are central to economic inactivity, reforming SSP is crucial to getting people well and back to work. There needs to be a balance between addressing the current system’s inadequacies without hindering the viability of SMEs, which are the backbone of business in the UK.

If policymakers can resolve the issues that vulnerable workers face while still keeping businesses thriving, the UK’s SSP system will be a true safety net for our workforce.