Everything you must do now to protect your finances if you become seriously ill

Falling ill is something none of us see coming, but could happen at any time.

While a few days off work won’t affect most people in the long-term financially, anything more than even a couple of weeks can result in debt.

Long-term illness can come out of the blue, too – and if you’re not financially prepared, it can add stress to a tough situation. Make sure you consider planning ahead with these tips to mitigate any income loss from sick leave.

The first step to managing finances when it comes to long-term illness is to make sure you address health issues as soon as they come up, rather than waiting a long time. However, while the NHS is a brilliant service, it’s no secret that they are overstretched. It can take months (sometimes years) to see a specialist.

Health insurance can cost as little as around £10 a month but means you may be able to access GP and specialist care much faster. This means you can get diagnostic tests more quickly, giving you time to act on prevention rather than cure where possible.

Some health insurance brands offer incentives to keep you healthy too, such as discounted gym memberships or free fitness trackers like an Apple Watch.

The downside of health insurance is that some won’t take pre-existing conditions, while others will but it could cost you extra on your premium. So, it’s important to get it sooner rather than later to ensure you’re covered to access care in case something comes up.

Employees are entitled to Statutory Sick Pay if they are off sick from work – but this isn’t as much as their salary. So, if your workplace doesn’t include fully paid sick leave, you could be out of pocket quite fast. And self-employed people don’t get any sick pay at all!

Sickness insurance, also called income insurance, is worth considering if you are the main income in your household. It can help cover temporary shortfalls in your income if you’re taken ill for a period of time that reduces your ability to work. As with any insurance type, there is a lot of small print that includes various rules and restrictions, so make sure you read policies in detail before signing up.

Power of Attorney means giving someone else permission to take care of things on your behalf. It can be limited and temporary, or longer-term. Limited is often called Ordinary Power of Attorney, and is for things like unexpected physical illness or if you have to leave the country for a short time and need someone to handle things for you while you’re away.

Lasting Power of Attorney is for when you become mentally incapacitated, such as through dementia, accident, or other illness. Both Ordinary and Lasting POA can be for specific things, like a bank account, or a wide range of things like making decisions on your behalf for your children’s best interests.

You can arrange for OPOA by preparing a letter to send to your bank, credit cards and other institutions giving a person permission. Then, only send it when it’s needed. Lasting Power of Attorney can be set up at any time, but must be registered before it can be used. So, you can set it up and wait until it is required – and your nominee can be the one to register it, if you become incapacitated.

We all know we should have at least three months’ expenses tucked away as a safety net. But for most of us, that’s simply not possible. However, if you can save at least one month of basic expenses away, you’ll be in a safer position should illness strike.

Importantly, you should keep this fund somewhere a trusted person can also access it. This might be a separate bank account that you can enact Ordinary Power of Attorney on to give them access, cash in a secure place, or even an ‘emergency credit card’ which your trusted person can get hold of and use as an authorised user if they need to.

Saving £1,500 feels like a mammoth task. We have lots of ideas for making quick money here on our Mirror columns and on the MoneyMagpie site. A few quick ideas include:

• Switching current accounts for up to a £175 cash incentive
• Selling your old technology
• Reclaiming built-up energy credit if you have more than £100 (or one month’s energy) left in your account
• Clear your clutter and sell unwanted gifts and clothes on apps like Vinted
• Do online market research surveys a few minutes each day
• Switch your insurance using a cashback website.

If you are in a position to do so, open a credit card with a long 0% interest rate on it. Make a note of when the 0% runs out, and shop around for the next card at this time. Crucially: don’t spend anything on it, at all. Or, use it for a small amount each month – perhaps set it up for your streaming subscriptions – and pay in full each month, to continue using credit and keep your credit score strong.

The idea here is that, while using credit is not ideal, sickness is unpredictable. Having a credit card with a useable balance on standby to take on unexpected expenses or to pay a few bills while you’re on reduced sick pay will help stop you dropping into deep debt if it is on a 0% rate.

Some people can apply for Government benefits on a fast track, if their illness is determined terminal or there are other exceptional circumstances. You may also be able to apply for Carers Allowance or Attendance Allowance if somebody is looking after you.

However, there are also charities and other grants available to help people with both financial and practical help if they are ill for a long period of time. Check the Turn2Us benefits entitlement calculator as well as their grant finder.

There may be other grants available not listed on the grant finder, too. For example, if you work in a particular profession with a union or industry body, they may offer sickness insurance, grants or additional resources and support for their members who are taken ill. Make sure you do this research before you get ill, and keep the details to hand so that you – or a nominated person – can apply when you need to.

Some of the brands and websites we mention may be, or may have been, a partner of MoneyMagpie.com . However, we only ever mention brands we believe in and trust, so it never influences who we prioritise and link to.