Income Protection Calculator UK
Calculate how much monthly cover you need to protect your income if illness or injury prevents you from working. Free UK income protection insurance estimator.
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UK Income Protection Statistics 2024
Understanding Income Protection Insurance UK
What is Income Protection?
Income protection insurance provides a regular monthly payment (typically 50-65% of your gross salary) if you're unable to work due to illness, injury, or disability. Unlike other insurance types, it's designed to replace your income for the long term - potentially until you return to work, retire, or the policy ends.
Key Features of UK Income Protection
- Tax-free benefits - If you pay premiums personally, payments are completely tax-free
- Long-term cover - Can pay out until retirement (age 65-70)
- Broad cover - Covers any condition that prevents you working, not just specific diseases
- Mental health included - Most policies cover stress, anxiety, depression
- Rehabilitation support - Many insurers help you return to work
Types of Income Protection Policies
Full Income Protection
Pays until you recover, retire, or policy ends. Higher premiums but comprehensive cover.
- Long-term protection
- Pays until age 65-70
- Best for permanent conditions
Short-Term Income Protection
Pays for limited period (1-2 years). Lower premiums but time-limited benefits.
- Budget-friendly option
- Good for temporary illness
- Typically 12-24 month limit
Accident & Sickness (A&S)
Basic cover for accidents and short-term illness. Often employer-provided.
- Lowest premiums
- Limited conditions covered
- Usually 12 months max
Choosing Your Deferment Period
The deferment (or waiting) period is crucial - it determines when your policy starts paying and significantly affects your premium cost.
| Deferment Period | Best For | Premium Impact | You'll Need |
|---|---|---|---|
| 4 weeks | No sick pay, limited savings | Highest premiums (+50-80%) | 1 month expenses in savings |
| 8 weeks | Some sick pay or emergency fund | High premiums (+30-50%) | 2 months expenses |
| 13 weeks | Standard employer sick pay | Standard premiums (baseline) | 3 months expenses |
| 26 weeks | Good sick pay + savings | Lower premiums (-20-30%) | 6 months expenses |
| 52 weeks | Excellent sick pay package | Lowest premiums (-40-50%) | 12 months expenses |
Understanding 'Own Occupation' vs 'Any Occupation'
The definition of "unable to work" is critical to your policy's value:
| Definition | What It Means | Cost | Recommendation |
|---|---|---|---|
| Own Occupation | Pays if you can't do YOUR specific job | Highest | Best protection - strongly recommended |
| Suited Occupation | Pays if you can't do jobs suited to your skills/experience | Medium | Acceptable compromise |
| Any Occupation | Only pays if you can't do ANY work at all | Lowest | Avoid - very hard to claim |
UK Sick Pay & Benefits Guide
Statutory Sick Pay (SSP) 2025/26
- Current rate: £116.75 per week (approx. £506/month)
- Duration: Up to 28 weeks
- Waiting period: 3 qualifying days before payment starts
- Minimum earnings: £123 per week
What Happens When SSP Ends?
After 28 weeks of SSP, you may claim:
- Employment and Support Allowance (ESA) - means-tested benefit for those unable to work
- Universal Credit - if you have limited savings
- Personal Independence Payment (PIP) - for mobility/care needs
What Affects Your Premium Cost?
| Factor | Lower Premium | Higher Premium |
|---|---|---|
| Age | Younger (20s-30s) | Older (50s-60s) |
| Occupation | Office work, teaching, IT | Manual work, construction, NHS |
| Health | Non-smoker, healthy BMI, no conditions | Smoker, pre-existing conditions |
| Deferment | Longer waiting period (26+ weeks) | Short waiting period (4 weeks) |
| Cover Amount | Lower % of salary | Maximum 65% of salary |
| Policy Type | Short-term (1-2 years) | Full (to retirement) |
Frequently Asked Questions
Most UK insurers offer cover of 50-65% of your gross salary. You should aim to cover your essential monthly expenses including mortgage/rent, bills, food, and debt repayments. Our calculator helps you determine the minimum cover based on your actual expenses and recommended cover allowing for some flexibility.
Yes, if you pay your income protection premiums personally (not through your employer), the benefits you receive are completely tax-free. This means if your policy pays £2,000/month, you receive the full £2,000. If your employer pays the premiums (group income protection), benefits may be taxable as earnings.
The deferment period (also called waiting period) is how long you must be unable to work before your policy pays out. Common options are 4 weeks, 13 weeks (3 months), 26 weeks (6 months), or 52 weeks. Longer deferment periods result in significantly lower premiums but you need savings or employer sick pay to cover the waiting time.
Full income protection policies pay out until you return to work, retire, or the policy ends (typically at age 65-70). Short-term income protection policies typically pay for 1-2 years maximum but have much lower premiums. Choose based on whether you need protection against long-term disability or just short-term illness.
Income protection provides regular monthly payments if you can't work due to any illness or injury - it replaces your income. Critical illness pays a one-off lump sum only if you're diagnosed with a specific listed condition (cancer, heart attack, stroke, etc.). Income protection is generally more comprehensive as it covers a wider range of conditions and provides ongoing support.
Yes, most UK income protection policies cover mental health conditions like anxiety, depression, and stress, provided you disclosed any pre-existing conditions when applying. Mental health claims account for about 25% of all income protection claims in the UK. Ensure you're honest about mental health history when applying.
UK Statutory Sick Pay (SSP) is £116.75 per week (2025/26) - approximately £506 per month - for up to 28 weeks. This is unlikely to cover most people's essential expenses. Some employers offer enhanced sick pay, but this varies greatly. Income protection bridges the gap between your sick pay and normal income, ensuring bills are covered during long-term illness.
Premiums depend on age, health, occupation, cover amount, and deferment period. Typical costs range from £15-£50 per month for a 35-year-old non-smoker in an office job. Higher-risk occupations (manual workers, healthcare) pay more. Use our calculator to estimate your recommended cover, then get quotes from comparison sites for accurate pricing.
Related Financial Calculators
Last updated: January 2026 | Information reflects 2025/26 UK rates
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Understanding Your Results
Our Income Protection Calculator provides:
- Instant calculations - Results appear immediately
- Accurate formulas - Based on official UK standards
- Clear explanations - Understand how results are derived
- 2025/26 updated - Using current rates and regulations
Common Questions
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