How to manage your money if you become ill or disabled

Becoming ill or disabled can be difficult enough to live with even before your finances are affected, but experts explain that there are a number of ways you can manage if you find yourself suddenly unable to work.

According to the latest government statistics, around 16.8 million people in the UK had a disability in 2023-2024, which represents 25% of the total population – this means if you’ve become newly disabled or ill, you’re far from alone, and there are a number of places you can turn to for help.

From getting to grips with PIP, to searching to see if you’re eligible for grants, experts lay out the steps you can take to protect your finances while facing disability or illness.

Read more:

• What is PIP and how do I claim it? Everything you need to know about the DWP disability benefit
• How to navigate DWP disability benefit applications and PIP assessments
• The UK’s top mental health charities: How they help and how to support them

How can disability and illness affect finances?

Disability and illness can affect finances in a number of ways, from needing to take time off work, to buying medical equipment or accessibility tools, to having food delivered if you’re unable to leave your home. If you become ill or disabled, it’s important to know how you may have to budget in order to be aware of any new costs.

Research by Scope found that disabled households need an extra £1,095 each month on average just to have the same standard of living as non-disabled households. Scope found that as inflation is expected to rise over the next five years, the extra cost of disability is estimated to reach £1,224 per month by 2029 to 2030 financial year.

Simon Dukes, chief executive of Fair for You, a responsible lender specialising in helping people with poor credit, explained that many of its customers have a disability or long-term health condition “which makes it hard or impossible to work, or adds other costs like higher energy bills, specialist equipment and medication.”

“People on lower incomes, especially if they or their children have a disability, have to become experts at budgeting,” he said. “We speak to Fair for You customers who sometimes face impossible dilemmas like whether to fill up the car with petrol because they often have to get to hospital at short notice, or using that money for a food shop.”

What should I do to receive help?

When you first become ill or disabled, and you’re an employee, it’s worth knowing what your company’s policy on sick leave is, how much you can take, and how much you may be entitled to. Currently, you can get up to £123.25 per week statutory sick pay if you’re too ill to work, which is paid by your employer for up to 28 weeks.

If you are self-employed and temporarily unable to work due to illness, you should check if you have made enough national insurance contributions to qualify for New Style Employment and Support Allowance (ESA).

In any case, if you’re ill or disabled, you may be eligible for benefits. PIP, for example, is not means-tested, so you can apply for PIP even if you have a permanent job or savings – it’s worked out based on how much your disability or illness impacts your day-to-day life.

Charities including StepChange and Turn2us have benefits calculators which can help determine whether you’re getting all of the financial help you’re entitled to, while the Big Issue has previously written guides to applying for PIP.

If you’re already on universal credit, you can also apply for a budgeting advance to pay for essentials. This is an interest-free advance on your universal credit that you can apply for if you meet certain criteria. You could also look into the Help to Save scheme. People claiming working tax credit or universal credit could be eligible for the scheme, which allows you to boost your savings by 50p for every £1 saved.

Meanwhile, you can also apply for a Disabled Persons Railcard to help save on transport costs, or look into Meals on Wheels if you’re on low income and less able to leave the house.

“More than £24bn in government benefits go unclaimed each year because people aren’t aware of what they’re entitled to,” said Dukes. “Fair for You has a benefits calculator on our website which we recommend to our customers, and many discover new income they didn’t know about. So if there’s been a change in your circumstances, definitely look for a benefits calculator.”

He added: “It’s really important to talk to your bank, your employer and any creditors early, before the financial impacts become more serious. Even if it feels daunting, the reality is that they may be able to do things to help you, and it’s in their interests to work together to find the right solutions.

“An important part of financial resilience is simply knowing the different options available to you.”

Are there any charities which can help with illness and disability?

There are many different charities and organisations that can help you financially if you have an illness or disability – whether that’s helping with the upfront costs of mobility aids, or with helping you get on benefits.

Scope has a list of grants you can apply for if you need to make your home more accessible or help to pay for your energy bill. As well as providing financial guidance for disabled people, Scope also offers practical advice and emotional support.

Sense and MoneyHelper also has lists of grants you can apply for if you’re ill or disabled, while Family Fund focuses on grants for young disabled people aged 18 to 24 living at home.

Better Mobility has also compiled resources that may be able to help with the upfront costs of affording mobility equipment.

The Big Issue has also written several guides on disability and illness which may help you navigate the financial impacts, from applying for PIP, to going through PIP assessments, to where to get free financial advice.

Do you have a story to tell or opinions to share about this? Get in touch and tell us more. 

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