Half of UK workers are concerned about their financial resilience

New research warns millions could face hardship if illness stops them working, yet few have protection

Half of the UK’s working population believes they would feel more financially resilient if they had income protection insurance in place. Despite this, only about a quarter of workers currently hold a policy[1].

The findings emphasise a growing concern across the UK workforce: while many recognise the importance of safeguarding their income, few have taken steps to do so. This gap between awareness and action highlights the need for clearer guidance and easier access to appropriate cover.

Financial dependence and vulnerability

The study revealed that the average UK worker supports three dependants, with nearly a third also caring for a pet that relies on their income for food, shelter, and well-being. Among parents of older children, almost half provide financial support for the same number of dependants.

This financial commitment impacts household budgets. Nearly half of working couples rely on both partners’ incomes to meet essential expenses, a figure that rises to 70% for younger adults aged 18 to 24. For many, losing one income due to illness or injury could cause immediate financial hardship.

Rising living costs have further eroded resilience. The study shows that the average household debt has risen to over £20,000, an increase of more than £1,700 compared to the previous year. One-third of workers have less than £5,000 in savings, nearly a quarter have less than £1,000, and almost one in ten have no savings at all. This limited financial cushion means that a single income disruption could quickly cause hardship.

Why income protection matters

Income protection insurance provides a regular, tax-free income if you’re unable to work due to illness or injury. It helps cover essential expenses such as rent or mortgage payments, utilities, and other daily living costs. For many, it serves as a financial safety net during unforeseen setbacks, offering peace of mind that vital bills will be settled.

With the high cost of living and low household savings, awareness of income protection benefits is increasing. However, a notable protection gap remains, especially among tenants, women, and single parents—groups that often face the toughest financial challenges and have limited access to tailored financial advice.

Shifting landscape of resilience

The rise in financial reliance among UK households highlights the importance of protection in personal financial planning. Data show that resilience is particularly at risk among younger workers, who often manage rent, student loans, and rising living expenses. Without sufficient protection, even a short-term loss of income can cause long-lasting financial difficulties.

Financial resilience involves not only having savings but also ensuring income continuity. For those with limited emergency funds, income protection acts as a vital safety net, enabling households to maintain stability during recovery periods. As awareness grows, more people are beginning to see that safeguarding their income is just as important as insuring their home or vehicle.

How would your finances be managed if you were unable to work?

Taking a proactive approach allows you to better prepare for life’s uncertainties, protecting not only your income but also the well-being of those who rely on you. To discuss any concerns you may have, please contact us. We can assist you in exploring income protection options that suit your lifestyle, providing you with the security to face unexpected challenges confidently.

INSURANCE POLICIES HAVE TERMS, CONDITIONS, AND EXCLUSIONS. COVER LEVELS DEPEND ON INDIVIDUAL CIRCUMSTANCES. TAX TREATMENT DEPENDS ON YOUR PERSONAL SITUATION AND MAY CHANGE IN THE FUTURE. THIS ARTICLE DOES NOT CONSTITUTE FINANCIAL ADVICE.

Source data:

[1] UK Reaching Resilience Report 2025 – Income Protection and Financial Vulnerability Findings: https://www.lv.com/about-us/press/half-of-uk-workers-say-income-protection-would-improve-financial-resilience