Why Is Income Protection Worth Considering?
Charlotte Elgar · Posted on: September 12th 2025 · read
For most of us, our income is what keeps life running smoothly - from paying rent or the mortgage, to covering bills and food shopping. But what would happen if you suddenly couldn’t work because of illness or injury?
It’s not something many of us like to think about, but it’s a very real risk.
Statutory Sick Pay (SSP) is currently just £118.75 per week, subject to tax and national insurance, and is only paid for up to 28 weeks. Self-employed individuals are not eligible for SSP and need to ensure sufficient resources are in place in the event of not being able to work. Employer sick pay can help, but it’s not always enough or guaranteed.
Where state and employer support may fall short, an income protection policy can step in to provide the extra cover needed.
What Is Income Protection?
It’s an insurance policy that pays you a regular income if you’re unable to work due to illness or injury. Unlike critical illness cover (which pays a lump sum if you're diagnosed with a serious illness), income protection provides monthly payments for as long as you are off work; up to the end of the policy, or until you recover. Other features of an income protection policy include:
- It ensures a regular income stream The most obvious benefit is that it replaces part of your income, usually around 50-70% of your salary if you can’t work. This ensures everyday expenses are met and provides peace of mind while dealing with health issues.
- You can focus on getting better Knowing the bills are taken care of means you can take the time you need to get better, without rushing back to work before you’re ready. It provides additional breathing space to focus on your recovery.
- Choose a term to suit you Some people think income protection only covers a few months off work, but many policies offer long-term cover, including term options for up to retirement age.
- Allows for flexibility You can choose how long to wait before the payments start (known as the ‘deferred period’), how long the policy runs for, and whether the payments should increase with inflation. The deferred period could be set to align with the length of time you would receive sick pay from your employer. This flexibility enables you to choose a suitable policy to match your budget and needs.
- Additional policy features Many providers now include extra features with their policies, for example, health checks, mental health support, and return-to-work programmes.
- Tax free payments* If you take out the policy yourself (*rather than through your employer), the monthly payments are tax-free. That makes the money go a bit further when you need it most.
Who Should Think About Income Protection?
This kind of cover isn’t just for a specific group. It can be useful for a wide range of people, and is especially worth considering if:
You’re self-employed and don’t get sick pay
You’re the main earner in your household
You’ve got children or other people relying on your income
You don’t have much in savings
Your employer’s sick pay is limited
Planning For Peace Of Mind
While many people focus on life cover or critical illness insurance, income protection fills the essential gap of maintaining your lifestyle and covering day-to-day expenses when you’re unable to work, and regardless of what life throws your way.
No one expects to be off work on a long-term basis, but if it does happen, this kind of policy can keep your finances stable so you have one less thing to worry about.
The cost of your premiums will depend on things like your age, health, job, and how the policy is set up, but for the peace of mind an income protection policy offers, many people see it as money well spent.
MHA Wealth Can Help
If you're thinking about taking out a policy, it’s a good idea to get advice from an independent financial advisor who can help you find the right cover for your circumstances.
Should you wish to explore income protection policies in more detail or, to discuss other investment and financial planning needs, please contact a member of the MHA Wealth team for further guidance.
Important information
MHA Wealth is the trading name of MHA Wealth Ltd, a company registered in England (1916615) with registered office at The Pinnacle, 150 Midsummer Boulevard, Milton Keynes, MK9 1LZ. MHA Wealth is authorised and regulated by the Financial Conduct Authority (FCA) with registered number 143715 and is a member of the London Stock Exchange. MHA Wealth is a member of the MHA group. Further information on the MHA group can be found at https://www.mha.co.uk/details-of-mha-uk-entities.
This is a marketing communication for general information only, and is not intended to be individual investment advice, a recommendation, tax, or legal advice. The views expressed in this article are those of MHA Wealth or its staff and should not be considered as advice or a recommendation to buy, sell or hold a particular investment or product. In particular, the information provided will not address your personal circumstances, objectives, and attitude towards risk.
This information represents our understanding at the time of publication of current law and HM Revenue & Customs practice. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. You are therefore recommended to seek professional regulated advice before taking any action.
