Higher mortgage rates, rising energy costs, and continued inflation have put pressure on many household budgets.
Advisers spend time helping customers find the right rate, lender and term, yet the question of how those payments would be met if a borrower’s income stopped isn’t always prioritised in the same way. Protection can be seen as an optional add-on, but in a cost-of-living crisis, Income Protection (IP) has never been more relevant.
THE VULNERABILITY GAP
Two in five consumers (39%) have £1,000 or less in savings, and a quarter (23%) have £200 or less1. If illness or injury occurs, these savings will offer just a limited buffer. With Statutory Sick Pay set at £118.752 per week, many households may find it challenging to meet regular financial commitments such as mortgage repayments and living expenses.
This vulnerability gap is precisely where Income Protection steps in. By replacing up to 50-70% of gross income until they’re fit to return to work, IP provides the breathing room families need if the unthinkable happens. For customers with large mortgage commitments, income protection can offer peace of mind and help them keep up with repayments if their income stops.
AFFORDABILITY: DEBUNKING THE MYTHS
The greatest barrier to IP uptake isn’t always need, it’s perception. Many customers assume Income Protection is prohibitively expensive, placing it in the “nice to have” category rather than essential protection. In reality, cover can be surprisingly affordable, with some policies starting from as little as £5.453 per month – making essential protection accessible to almost everyone.
IP is far more flexible than most people think. Customers can align their deferred period with employer sick pay arrangements, significantly reducing premiums whilst maintaining comprehensive cover. Short-term IP policies, which pay benefits for just one or two years, also make the product accessible for those on tighter budgets.
Another key point often overlooked is timing. The earlier customers take out cover, the more cost-effective it becomes. Younger, healthier applicants not only secure lower premiums, but lock it in for the policy’s duration. Alternatively, age-costed premiums offer a lower-cost entry point, with premiums that start cheaper and gradually increase over time as the risk of claim rises – ideal for those wanting affordable protection at the outset.
THE OPPORTUNITY
More than one in four (27%) people have taken more than a month off work due to ill-health or injury4. For mortgage holders, this represents an important consideration in their financial planning.
Income Protection sits naturally within the mortgage advice journey. When customers are focused on securing their property, they’re already thinking about protection. Life insurance often features prominently in these conversations. But whilst life cover addresses the worst-case scenario, income protection focuses on the everyday reality of being unable to work for a period of time.
Revisiting protection needs during annual reviews or remortgage discussions can reveal changes like a new job, family growth, or increased debt. It’s also a good time to check cover keeps pace with inflation and remains competitive. Lifestyle changes, such as quitting smoking, could even lower premiums.
BUILDING CUSTOMER RESILIENCE
Rising living costs have reduced the financial buffer many households maintain. An unexpected loss of income can unravel even the most carefully planned finances. As the regulator continues to emphasise good outcomes under Consumer Duty, advisers who embed IP in their recommendations demonstrate both professionalism and care.
It’s worth noting, Income Protection differs from Critical Illness Cover. While Critical Illness pays a lump sum for specific serious conditions like cancer, heart attack, or stroke, Income Protection provides a regular monthly income if someone can’t work due to a wider range of issues, such as mental health problems, back injuries, broken bones, or stress-related illnesses that wouldn’t usually trigger a Critical Illness claim.
When a customer faces extended absence from work, IP doesn’t just keep their mortgage paid; it preserves their credit rating, maintains their standard of living, and removes the desperate pressure to return to work before they’re fully recovered. This means the customer can concentrate on recovery rather than getting by.
Ricky Butler is head of new business and growth at protection advice specialists, LifeSearch
1 Finder – Savings statistics: Average UK savings in 2025
2 GOV.uk – Statutory Sick Pay (SSP) : Overview – GOV.UK
3 LifeSearch.com – Income Protection Quotes (Price correct as of June 2025)
4 Cirencester Friendly – More than a quarter of people have taken a month or more off work due to illness or injury
