It’s easy to assume the biggest financial risk is what happens if we’re no longer here. That’s why so many people take out life insurance.
But for many families, the more immediate challenge is something else entirely, losing your income while you’re still alive. An illness or injury that keeps you off work for months can turn everyday life into a financial balancing act, especially when Statutory Sick Pay is just £118.75 a week.
Scenario Snapshots: How 12 Months Off Work Hits Different Families
- Solo earner, no backup
James, 42, works full-time in sales. He’s healthy, active and has always assumed he’d bounce back from anything. But after a car accident, he’s off work for months. With no employer sick pay and no income protection, he’s relying on savings and SSP. By month four, the mortgage is overdue, and credit cards are the fallback.
- Dual-income couple, one income lost
Helen and Sam both work. When Helen is diagnosed with cancer, she steps away from work to focus on treatment. Sam keeps working, but they rely on both incomes to keep up with their mortgage, childcare, and bills. Without Helen’s income, everything tightens. A few months in, they pause pension contributions, then cancel holidays, and finally dip into their emergency fund, which quickly runs out.
- Self-employed with no cover
Priya runs a successful freelance design business. She’s always planned to sort out insurance “later.” When long COVID sidelines her for eight months, client work vanishes. No sick pay, no income, and no way to cover basic expenses. She ends up borrowing from family and considering selling her flat to stay afloat.
The Math Behind the Strain
Statutory Sick Pay is now £118.75 per week (up to 28 weeks). That’s around £515 per month before tax, and only if you qualify, as waiting days apply. Some employers offer more through occupational schemes, but many don’t. For most families, this barely covers essentials. The average UK household now spends around £2,700 per month on basics like housing, food, transport and utilities. The gap is clear and steep.
What Income Protection Actually Does
Income protection insurance pays a monthly amount if you’re unable to work due to illness or injury. It typically covers 50–65% of your gross income (some policies up to 70%) and kicks in after a waiting period of your choice, often 4, 13, or 26 weeks. It isn’t tied to a specific diagnosis and continues for as long as the policy allows. Some even include rehab or mental health support to help you return to work sooner.
A few things to know about income protection:
- Deferred period options: You can choose how long to wait (from 4 to 52+ weeks) before the policy starts paying.
- Own occupation vs suited work: Check whether your policy pays if you can’t do your specific job, or just any job.
- Support extras: Many policies offer added help like physiotherapy, counselling, or return-to-work planning.
Final Word: Don’t Wait for a Wake-Up Call
Long-term illness is now one of the biggest reasons people are unable to work in the UK, according to ONS data. Sickness absence is elevated, and millions are economically inactive due to long-term health conditions. The question isn’t just “What if?”, it’s “Would I be ready?”
For a quick check-up on your protection plan, speak to the team at Cedar House Financial. We’ll walk you through what’s already in place, and help fill any gaps that could catch you off guard later.