I think the law on this was clarified a year or so ago on this. According to the gov.uk site
https://www.gov.uk/taking-sick-leave:
"Statutory holiday entitlement is built up (accrued) while an employee is off work sick (no matter how long they’re off).
Any statutory holiday entitlement that isn’t used because of illness can be carried over into the next leave year."
I think the key word here though may be 'statutory' (statutory holidays being 5.6 weeks paid holiday per year including public/bank holidays)- so if the company actually offers more holidays then maybe they only have to honour up to the statutory figure,