Investment, protection and retirement specialist, LV= reveals half of the UK’s working population would feel more financially resilient if they had insurance in place to protect their income in the event they were unable to work due to illness or injury. However, despite its potential to provide peace of mind, only 27% of UK workers currently hold an Income Protection policy.
Income Protection Action Week (IPAW), organised annually by the Income Protection Task Force (IPTF), aims to highlight the importance of Income Protection and the value of this type of cover to financial advisers and the public.
The findings, uncovered in LV’s third Reaching Resilience report, shed light on the extent of financial dependency among UK workers. On average, each worker supports three dependents who rely on their income and three in ten (29%) also care for a pet that depends on them for food, shelter and general wellbeing. Among parents of older children, nearly half report supporting the same number of dependents.
The report also shows that financial vulnerability is also prevalent among couples. Almost half (45%) of working couples rely on both incomes to meet monthly living expenses, rising to 70% for younger workers (aged 18 to 24). This means if one partner were unable to work, many households would face immediate financial strain.
Household debt continues to climb, with the average amount increasing by £1,734 between 2023 and 2024 to £20,640. A third of UK workers have less than £5,000 in savings, almost a quarter have less than £1,000 and just under 1 in 10 have no savings at all.
For those with limited or no financial buffer, Income Protection could prove invaluable in providing financial confidence, offering a regular, tax-free monthly income during periods of illness or injury. This could help cover essential costs such as rent, mortgage payments, utilities, and other living expenses.
LV’s research also shows the protection gap for under-served markets including renters, women, and single parents, highlighting the need and opportunity for advisers to engage with these groups on Income Protection.
Mike Farrell, Protection Sales Director at LV=, said:
“We’re proud to support the IPTF this week to highlight the need for Income Protection which has never been more pressing. As the cost-of-living crisis continues to affect households across the UK, people are becoming increasingly aware of their financial vulnerability and the critical role that income protection insurance can play.
With rising energy bills, rent and mortgage costs, having an Income Protection policy can offer clients essential financial security if they are unable to work. Our portfolio is designed to support tailored financial planning, and we remain committed to helping our customers build both emotional and financial resilience, helping them face life’s challenges with greater confidence and peace of mind.”
Jo Miller, Managing Director at IPTF, said:
“Despite growth in income protection sales over the last few years, there is still some way to go until anywhere near enough people have the cover that they need to be financially resilient should the worst happen. LV’s research highlights why income protection should be the foundation of all financial planning and supports the work that we are doing at IPTF through IPAW and other initiatives to support advisers to have better quality conversations with their clients.”
LV= supports advisers by providing a comprehensive range of products to protect people’s income as well as relevant insights, tools and resources to help advisers have impactful protection conversations.
