More than one million working people throughout the United Kingdom are set to experience an uplift in their living standards due to enhancements to Statutory Sick Pay, government ministers announced on 5 March 2025.
The reforms are a cornerstone of the government’s Plan for Change, aimed at strengthening workers’ rights, fostering a healthier and more productive workforce, and driving economic growth.
Under the new measures, approximately 1.3 million low-wage workers who fall ill will benefit from either 80% of their average weekly earnings or the updated Statutory Sick Pay rate of £118.75 per week, effective from April—whichever amount is lower.
For some of the country’s lowest earners, this could mean an increase of up to £100 per week compared to the existing system.
This financial safety net is designed to allow workers to take necessary time off to recover without the fear of losing their livelihoods, helping them remain in employment rather than leaving the workforce entirely.
Deputy Prime Minister Angela Rayner MP hailed the changes as a pivotal step forward, stating:
“What we put into our workforce, we get back and more. That’s why we’re making Statutory Sick Pay a right for every worker for the first time so people can stay in work rather than risk dropping out. This is a pro-worker, pro-business government in action—boosting productivity, while ensuring people don’t have to choose between health and wealth, helping deliver our Plan for Change.”
The initiative comes amid concerns over the UK’s lagging productivity, which has declined more sharply than in other nations in recent years. The World Bank has warned that “without improvements in productivity, there is no economic growth.” Today’s reforms aim to address this by enhancing workforce resilience and supporting a decade of national renewal.
Secretary of State for Work and Pensions Liz Kendall MP added:
“For too long, sick workers have had to decide between staying at home and losing a day’s pay or soldiering on at their own risk just to make ends meet. No one should ever have to choose between their health and earning a living, which is why we are making this landmark change. The new rate is good for workers and fair on businesses as part of our plan to boost rights and Make Work Pay, while delivering our Plan for Change.”
The government also published its response to a consultation on Statutory Sick Pay today, alongside updates to the Employment Rights Bill. These include measures to address exploitative practices such as fire-and-rehire and the use of zero-hour contracts.
The decision to set the new sick pay rate followed over 1,700 responses to a six-week consultation, reflecting input from businesses, charities, trade unions, and workers. Additional reforms include removing the Lower Earnings Limit (currently £123 per week) for eligibility and guaranteeing sick pay from the first day of illness.
TUC General Secretary Paul Nowak welcomed the changes, saying:
“Nobody should be plunged into hardship when they become ill. These reforms will stop millions from facing a financial cliff edge if they get sick. Making statutory sick pay available to all workers—and from day one—shows why the government’s Employment Rights Bill is so important. With sick pay rights from the first day of sickness, you will know that your family is protected. And you can take the time you need to recover.”
The government views these reforms as an initial step, with the TUC expressing hope for further increases to sick pay rates in the future. By striking a balance between employee support and business considerations, the changes aim to incentivise a return to work while providing essential financial security, paving the way for sustained economic growth.