Only 16% of full-time workers have income protection insurance cover, according to the latest income protection survey of 2,000 UK adults by Manchester-based mutual Shepherds Friendly.
Despite a 2% increase from last year’s figure, the finding shows income protection is still one of the most overlooked insurance products on the market.
This is despite 81% of respondents without cover renting or having a mortgage, 44% with children under the age of 17 and 28% single and at a higher financial risk if unable to work.
When asked what would get those currently without cover talking to a financial adviser, 28% said a free consultation would be most enticing, followed by the knowledge there are no broker fees (22%), clear, jargon-free advice (12%) and online reviews and testimonials (12%). Nearly one in five (19%) said nothing would persuade them.
Product feature-wise, 43% of those without cover said price would be the most important in considering a protection product, while preventative care topped the preferred benefits. Offering a range of health services designed to diagnose conditions topped the list with 26% alongside access to a virtual GP service (a rise from 22% last year and particularly valued by younger workers, peaking at 34% for 25 to 34-year-olds). Access to cancer screening and access to physical care such as a physio were joint second with 25%.
The low IP take-up is particularly revealing considering more than one in five (20%) full-time workers aged between 18 and 64 experienced a period where they were out of work and didn’t receive their usual earnings – rising to 40% for those aged between 18 and 24.
However, the relatively high likelihood of workers needing to claim on IP at some point in their careers along with concerns to future income security because of illness or injury present opportunities for protection advisers. The main concern from all age groups was inflation and the rising cost of living (68%), especially among those aged between 18 and 44, citing it as the main factor to threaten their income over the next five years. Fears of an economic downturn was the second-highest factor (60%), above illness and a long-term health condition (51%).
AI’s potential impact on job security was cited by 48% as respondents as a concern, while 46% feared accidental injury would impact future earnings, rising to 68% for 18-24-year-olds.
In total, 38% of respondents expected factors outside of their control to affect their income within the next five years, with 21% saying it was unlikely, suggesting many workers were aware of the risks of losing income despite not having protection in place.
Encouragingly, despite a lack of knowledge in some areas – 14% of respondents said they didn’t know what IP covers at all – 70% of those surveyed had heard of income protection as a product, with awareness increasing with age.
However, misconceptions around what IP includes persist, with 41% of respondents who don’t have a policy thinking it covers redundancy – and 49% thinking lifestyle factors such as drinking alcohol regularly or existing health conditions automatically rule them out of cover, increasing to 57% for 18 to 24-year-olds. These misconceptions remain common across every age group.
Dan Simpson, chief commercial officer at Shepherds Friendly, said: “The findings from this year's research suggest that low Income Protection take-up is not primarily driven by a lack of awareness. Instead, misconceptions about what the product does, concerns about eligibility and uncertainty about its value appear to be preventing many consumers from engaging with protection conversations.
“For advisers, this creates a significant opportunity: education, reassurance and clearer communication could help more clients recognise the value of protecting their income.
“Price remains the dominant purchasing factor, but health and wellbeing benefits are also popular. There is therefore an opportunity for advisers to demonstrate both the protection and wider support available through modern policies to help improve engagement.”
The full report is available here: https://shepherdsfriendly.blob.core.windows.net/pdf-media/IP-survey-2026.pdf
