The Association of British Insurers reported that £209 million was paid out on individual income protection claims in 2025, up 2% on the previous year’s record, with 79% of new claims accepted. Musculoskeletal conditions remained the leading cause at a third of claims, and mental health conditions accounted for nearly one in five. The average claim paid out £10,700 – a meaningful sum, but the real value of the cover is what it replaces: a regular income, typically around 60% of salary, for as long as you’re unable to work.
Employed with sick pay feels like cover. It usually isn’t enough.
Reforms from April 2026 made Statutory Sick Pay more generous – it’s now payable from the first day of illness rather than after a three-day wait, and the previous earnings floor has been removed, so more low-paid and part-time workers qualify. Even so, the rate itself is £123.25 a week, and it runs for a maximum of 28 weeks. For most households, that’s a significant income drop from day one, and a cliff edge once the 28 weeks run out, regardless of how much better the timing of payment has become.
Self-employed with no sick pay at all
Statutory Sick Pay only applies to employees. If you work for yourself, none of the April 2026 reforms change anything for you, because there was never a Statutory Sick Pay entitlement to reform in the first place. The safety net for a self-employed person unable to work is essentially whatever’s in the business account, plus Universal Credit or New Style Employment and Support Allowance if you qualify – both means-tested or contribution-based, and neither designed to replace a working income at anything close to its previous level. Income protection is arguably more valuable here than anywhere else, precisely because it’s covering a gap that has no other fallback attached to it at all.
Leaving the Armed Forces: cover that doesn’t automatically follow you out
Serving personnel typically have some level of in-service protection, whether through the Armed Forces Compensation Scheme for service-attributable injury, death-in-service benefits, or unit-level arrangements. That cover generally ends the moment you leave the Services, whatever the reason for leaving. If you move into employment with a new employer, their sick pay provision may be considerably less generous than what you were used to in service. If you move into self-employment, as a meaningful number of veterans do, there’s no employer sick pay of any kind to fall back on. Resettlement planning tends to focus heavily on pensions and the transition itself; personal income protection is worth adding to that list well before your discharge date, rather than picking it up as an afterthought once civilian life is already underway.
What’s worth checking first
Before taking out new cover, it’s worth establishing exactly what you already have – employer sick pay terms, any group income protection provided through work, and how long each actually lasts – since the gap you need to insure is the difference between that and your real living costs, not your full income from day one. Getting that starting point right is usually what keeps the cost of a policy sensible.
Let’s work out where your gap actually is
We work with employed, self-employed and Armed Forces clients across Poole, Bournemouth and the wider Dorset area to work out what would actually happen to your income if you couldn’t work, and what level of cover genuinely closes that gap. If you’d like your own position reviewed, get in touch and we’re happy to have a no-obligation conversation.
This article is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only. All information is correct at the time of writing (September 2026) and is subject to change in the future.
Income protection insurance has no cash-in value at any time and will cease at the end of the policy term. If premiums are not maintained, cover will lapse.