It’s more than likely that you’ll become ill at some point – whether that’s a cold, period pains, mental health concerns, or something else, we’re not immune to illness. Particularly as a freelancer, you may work longer hours or take on more work than you really should, which can cause burnout and stress – although you might not view this as ‘illness’, your body will feel the effects and need to rest and recuperate.
That might come in the form of a mental health day, but it still counts as illness – and you need to be prepared for when that might happen. Taking a day off ill here and there might not seem like it will have much of an impact, but a day’s work for a freelancer can mean the difference between paying your bills on time and not. Although I’m definitely not trying to scaremonger, it’s important to remember that as a freelancer, you don’t have the same benefits as a full-time employee, such as Statutory Sick Pay (SSP) – and preparation is key.
Fortunately, in the UK, we don’t need to think about healthcare costs too much, as the majority of treatment and care is provided through the NHS. Although this puts UK freelancers in a more privileged position than in other countries, loss of earnings through illness can still financially cripple a small business.
What are your options as a freelancer?
- Apply for Employment and Support Allowance (ESA)
This isn’t the best piece of advice, but it’s still relevant to include, as it may be appropriate for certain freelancers. There’s strict eligibility criteria. You need to be under the state pension age (which is usually around 68 years old) and have a medical condition or disability that stops you from working as much as you would normally. With New Style ESA, you also need to have been working in the last two to three years, where you will have made National Insurance contributions. This can be through employment or self-employment.
You’ll be paid every two weeks and should usually receive £74.35 each week. For many freelancers, however, this isn’t the best option, as the amount you receive is extremely low. Unless you’re going to out of work due to illness or disability for a while, it’s probably not worth applying for.
- Take out income protection insurance
A much more realistic option for freelancers and self-employed workers is to take out income protection insurance. Sometimes, even employed workers consider taking out income protection insurance, as this can cover the costs of mortgages, rent, bills, and medical costs, if you do suddenly become seriously ill.
Most illnesses are covered, but it’s important to check with the provider before you go ahead with a policy. You’ll be asked a number of questions, which are similar to those that you might be asked for a life insurance policy, such as smoker status, your job, age etc.
Protection insurance then costs a monthly or yearly amount, which will differ for each individual, dependent on the type of cover you need. Although most of us probably won’t need to make an income protection claim, it’s the reassurance of having that back up there.
- Create an emergency fund
Although income protection is a sensible idea, it’s not always feasible. If you need a couple of days off work for a cold or migraine, you’re probably not going to put in a claim from your insurance provider. This is where your emergency fund can help. Simply put, an emergency fund is a pot of money that you can dip in and out of when you require. This could be because you’ve had a difficult month finding new work, or a couple of your larger clients have dropped out – or perhaps, you just need to cover your earnings for the week you had off with a stomach bug.
Keep around three months’ worth of wages aside – this is the amount you know that can cover your household bills, your company expenses, and anything else. Once you have that saved up, don’t touch it (I know, it’s tempting to book a holiday instead), until the time comes that you really need it.
Letting clients know
If you’re ill for a prolonged period of time, then it’s only right to let your clients know. Although we don’t always know how long we’re going to be sick for, giving clients or customers the heads up, is a preliminary measure. If you’ve developed a relationship with your client over time, they’re more than likely to be understanding about the situation and might be happy to push work back for the time being.
Another option would be to pass the work over to another freelancer (preferably one that you’ve worked with before) for a temporary period. This means that although you won’t be receiving the earnings, you will maintain that important relationship with your client.
Don’t feel guilty
Remember – we’re all human and illness is a natural and inevitable part of life. As a freelancer, make sure you can afford to be ill, by backing yourself up with either insurance or an emergency fund.
Talk to us today if you’re concerned about illness as a freelancer and advice on how to prepare for it.