Rights around holiday pay, pensions and continuity of service when off sick

Updated: 4 Oct, 2025
By Chris Salmon

Taking time off work because of an accident or illness can raise questions about your employment rights. Workers often worry about losing out on holiday pay, pension contributions or continuity of service. This article explains your rights while off sick and how they are protected under UK employment law.

At a glance

• Your holiday and pension rights continue during sickness absence under the Working Time Regulations 1998 (Source: legislation.gov.uk)
• Holiday pay cannot usually be lost because of sickness absence.
• Pension contributions depend on your employer’s scheme rules but are usually maintained during paid leave.
• Continuity of service is protected during periods of sickness absence.
• Employment rights are backed by the Working Time Regulations and other employment law.

Holiday pay while off sick

Under the Working Time Regulations, you continue to accrue at least 5.6 weeks of paid annual leave while off sick. This applies whether you are on Statutory Sick Pay (SSP), contractual sick pay or unpaid sick leave.

If you are unable to take holiday because of your illness, you are entitled to carry unused holiday into the next leave year. Employers cannot lawfully refuse you this right.

Pensions during sickness absence

What happens with your pension depends on your employer’s scheme and the terms of your contract:

• During paid sick leave: Employer and employee contributions usually continue as normal.
• During unpaid sick leave: Contributions may be paused unless your scheme provides otherwise.
• Defined benefit schemes: Your benefits may still be calculated as if contributions were being made, but you should check with your pension provider.

It is important to confirm your rights with your HR department or pension scheme administrator. The Pensions Regulator also provides guidance on employer obligations.

Continuity of service

Your continuity of service is not broken by sickness absence. This means your length of service for employment rights purposes, such as redundancy pay, unfair dismissal claims and notice periods, continues to build while you are off sick.

Continuity is only broken if your contract is ended and you do not return to work. Employers cannot dismiss you solely because you are absent due to a legitimate illness or injury without following proper legal procedures.

Practical example

A care assistant broke her arm in a fall at work and was off sick for six months. During this time, she accrued her full statutory holiday entitlement and her employer continued paying into her pension while she received contractual sick pay. Her continuity of service was unaffected, so when she later reached two years of service, she qualified for full redundancy rights.

Key takeaway

Even if you are off work for a long period, your holiday pay, pensions and continuity of service rights are protected. Always check your employment contract for any enhanced sick pay or pension arrangements, and seek advice if your employer does not meet their legal obligations.

About the author

Chris Salmon is a legal commentator and co-founder of Quittance Legal Services. He has written extensively about workplace accidents, employment rights and the claims process. Chris's work has been cited in national media and he regularly contributes practical guidance to help injured workers understand their options.

More about Chris and WAAC

Last reviewed October 2025 by Chris Salmon

External references

• GOV.UK: Statutory Sick Pay (SSP) - official rules on eligibility, rates and duration of SSP.
• ACAS: Reasonable adjustments - when employers must make changes for staff with health conditions.
• ACAS: Phased return to work - guidance on structured returns after sickness absence.
• GOV.UK: Unfair and constructive dismissal - explains protections against dismissal during sickness absence.