How to protect your income

People insure the things that would be annoying to lose — the phone, the holiday, the car — and leave uninsured the one thing everything else depends on: their ability to earn. It's a strange blind spot. Your income pays the mortgage, the food, the insurance on all those other things. Ask yourself the question honestly: if it stopped tomorrow because of illness or injury, how long before something important breaks?

This guide won't sell you a policy — we're coaches, not advisers, and choosing cover is regulated advice. What it will do is show you how to work out your own exposure, explain in plain English what the three types of protection actually do, and arm you with the questions that make a conversation with a regulated adviser genuinely useful.

What the state safety net actually pays

Start with the floor, because it's lower than most people assume. If you're employed and too ill to work, Statutory Sick Pay is currently £123.25 a week (2026-27) — or 80% of your average weekly earnings if that's less — paid by your employer from your first full day off sick, for up to 28 weeks. That's roughly £534 a month. Check your own payslip maths against your rent or mortgage and you'll see the problem immediately.

Some employers pay considerably more than the statutory minimum, for a while — and that ‘for a while’ is exactly what you need to find out. If you're self-employed, there is no SSP at all: no work generally means no income from day one, which is why protection matters even more when you work for yourself (our self-employed money guide covers the wider picture).

£123.25Statutory Sick Pay per week in 2026-27 — for many households, less than a tenth of what actually goes out each month

Work out your own gap

The exposure isn't a feeling; it's a number you can calculate in ten minutes. You need three figures: your essential monthly outgoings (your survival number), what would actually come in if you were off sick (sick pay, then SSP, then anything else), and how many months your savings could plug the difference.

Notice what this calculation does: it converts a vague background worry into a specific, sized problem. For some people the answer is genuinely ‘we'd be fine for a year — partner's income, big buffer, generous employer scheme’. For others the honest answer is ‘we'd be in trouble by month two’. Both answers are useful. Only one of them was visible before you did the sums.

The three types of cover, in plain English

Protection products come in three basic shapes. They solve different problems, and the names don't help, so here's what each one actually does:

• Income protection — pays you a regular replacement income (typically a proportion of your earnings) if you can't work because of illness or injury, after a waiting period you choose, and keeps paying until you recover, the policy term ends, or you retire — depending on the policy. It protects the mechanism: your earning power. For most working people it's the most relevant and most overlooked of the three.
• Life insurance — pays a lump sum (or an income) if you die during the term. It matters when someone else depends on your earnings: a partner, children, a joint mortgage. It does nothing for you while you're alive, which is exactly why it's cheap relative to what it covers.
• Critical illness cover — pays a one-off lump sum if you're diagnosed with one of the specific serious conditions listed in the policy. The key word is listed: policies differ widely in what counts and at what severity, which is one of the main reasons this is adviser territory rather than a comparison-site impulse buy.

The three aren't rivals — they're answers to different questions. ‘What replaces my salary if I'm off for two years?’ is income protection. ‘What pays the mortgage off if I die?’ is life cover. ‘What would a serious diagnosis cost us in one go?’ is where critical illness fits. Plenty of people sensibly hold none, one, or a combination — it depends entirely on who relies on you and what would actually break.

Check what you already have — before buying anything

The most common protection mistake isn't buying the wrong policy; it's paying for cover you already hold. Before any adviser conversation, find out:

• Your employer's sick pay policy — full pay for how long, half pay for how long, and from what start date? It's in your contract or staff handbook, and it defines the waiting period you'd actually need on any policy.
• Death-in-service benefit — many employers pay a multiple of salary if you die while employed. If yours pays four times salary, that's life cover you already have (while you stay in the job — note the catch).
• Any group schemes — some employers provide group income protection or critical illness cover quietly, especially larger ones. Ask HR; people are routinely covered and don't know.
• Old policies — cover sold with a previous mortgage, or a policy a parent set up, may still be running. Dig out the paperwork before you duplicate it.

The questions that make an adviser conversation useful

When you do speak to a regulated adviser, you're not there to be sold to — you're there to get a personal calculation done properly. These questions keep the conversation on your terms:

1. How much cover do I actually need, based on my survival number and existing sick pay — not a standard multiple of salary?
2. What waiting period (the ‘deferred period’) makes sense given my employer's sick pay and my emergency fund? Longer waits mean cheaper premiums — how much cheaper, exactly?
3. Does this income protection policy cover me for being unable to do my own job, or only any job at all? The difference decides whether a claim actually pays.
4. How long would the policy pay out for — until retirement, or a capped one or two years — and what does each version cost?
5. What exactly is excluded, and how do pre-existing conditions affect me?
6. Does the cover keep pace with inflation, and what happens to it if I change jobs or go self-employed?

This is regulated territory — on purpose. Choosing and arranging protection — the type, the amount, the provider, the small print that decides whether a claim pays — is regulated financial advice, and that's a feature, not a hurdle: it means the person recommending a policy is accountable for the recommendation. Our job as coaches is the step before: helping you see your gap clearly and walk in with the right questions. Buzz Money Ltd is not authorised to give regulated advice, and does not — where you need it, we say so and can introduce you to Equity & General, authorised and regulated by the FCA (No. 474163), entirely optional and with no obligation. Our guide to finding a financial adviser explains how to choose anyone well.

Where protection sits in the queue

You can't do everything at once, and protection usually isn't the first move. A sensible order for most people: get a starter emergency fund in place (it's the waiting-period bridge every policy assumes you have), get expensive debt heading down, then size and fix the income gap — because the bigger your buffer, the longer the waiting period you can afford, and the cheaper the cover that fills what remains. Protection and the emergency fund aren't alternatives; they're the short-term and long-term halves of the same defence.

But do the ten-minute gap calculation today, wherever you are in that queue. The question — if my income stopped, what happens? — is the one risk that, left unexamined, can undo everything else you're building. Even if today's answer is ‘a plan for next year’, you've replaced a background dread with a decision. If you'd like the wider picture first, the free Financial Freedom Score includes protection as one of the eight areas it scores.