Last updated: 16 October 2026.
Quick answer: For many homeowners, income protection is worth considering because Statutory Sick Pay is limited to £123.25 a week for up to 28 weeks. Income protection is an insurance policy that pays you a regular income if illness or injury stops you working, helping you keep up your mortgage payments while you recover.
Your mortgage is probably your biggest monthly bill. You probably planned carefully for it when you bought, but it is easy to skip a harder question: what would happen if you could not work for six months, or a year?
It is not a comfortable question, but it is an important one. This blog explains what income protection is, what support you would get without it and how to decide whether it is worth it for you. It is general information, not personal advice.
What Is Income Protection and How Does It Work?
Income protection is an insurance policy that pays you a monthly income if you cannot work because of illness or injury. You pay a monthly premium and if you need to claim, the policy pays you a regular income after an agreed waiting period.
According to Which.co.uk, policies usually pay between 50% and 70% of your salary. Payments start after a waiting period, known as the deferred period, which you choose when you take out the policy. This typically ranges from one to 12 months, with 13 or 26 weeks being common choices.
The deferred period matters because it affects your cost. A longer deferred period generally means a lower premium. When choosing one, think about how long your employer’s sick pay or your savings would last.
Some policies can keep paying until you return to work or reach retirement. Income protection is different from critical illness cover, which pays a single lump sum if you are diagnosed with a serious illness listed in the policy.
What Support Would You Get If You Could Not Work?
If you are an employee, the basic safety net is Statutory Sick Pay. The gov.uk Statutory Sick Pay guide confirms it pays up to £123.25 a week, for a maximum of 28 weeks.
The rules changed on 6 April 2026. According to gov.uk guidance, Statutory Sick Pay is now paid from the first full day of absence. It is paid at 80% of your average weekly earnings or £123.25, whichever is lower.
Your employer may pay more than this through its own sick pay scheme, but schemes vary, so check your contract. If you are self employed, you cannot rely on Statutory Sick Pay at all, because you must be classed as an employee to get it.
What about government help with the mortgage itself? Support for Mortgage Interest can help with interest payments, but it is a loan that you repay with interest when you sell or transfer your home. You also need to be getting income related Employment and Support Allowance, Universal Credit or Pension Credit. If you get Universal Credit, you must have received it for 3 months in a row before the loan can start.
Could Statutory Sick Pay Cover Your Mortgage?
Probably not, unless your mortgage is small. At £123.25 a week, Statutory Sick Pay works out at about £534 a month. Here is how that compares with some example monthly mortgage payments:
| Example monthly mortgage payment | Statutory Sick Pay per month | Monthly shortfall |
|---|---|---|
| £800 | £534 | £266 |
| £1,200 | £534 | £666 |
| £1,600 | £534 | £1,066 |
These figures are before any other bills. Council tax, energy, food and childcare would all still need paying.
This is the gap income protection is designed to fill. A policy paying 50% to 70% of your salary would not replace your full income. However, it could make the difference between keeping up your mortgage and falling behind.
Do Income Protection Policies Actually Pay Out?
Yes and the latest figures show they pay out in large numbers. The Association of British Insurers reports that protection insurers paid out £7.84 billion in claims during 2025. Individual income protection payouts reached a record £209 million.
The average individual income protection claim was £10,700. Musculoskeletal conditions, such as back problems, were the most common reason for a claim, making up 33% of individual income protection claims. Mental health conditions accounted for 19%.
These figures are a useful reminder that claims are not only about rare or dramatic events. Everyday conditions such as back injuries and stress can keep people off work for months.
Claims are only paid when the policy terms are met, so it is important to answer every question honestly when you apply. Telling the insurer about your health and lifestyle at the start gives you the best chance of a smooth claim later.
Who Benefits Most From Income Protection?
Income protection is most valuable when you would struggle to cover your mortgage and bills from other sources. That often includes:
- self employed people, who do not get Statutory Sick Pay
- single income households, where one person pays the mortgage
- people with little in savings
- employees whose sick pay from work is limited or short
If your employer offers generous long term sick pay, or you have large savings, you may need less cover or a longer deferred period. It is worth checking what you already have before you buy anything.
Income protection is also different from mortgage payment protection insurance. Which? explains that mortgage payment protection is designed around your mortgage and can cover redundancy. Basic income protection usually does not cover redundancy, but it can pay for longer.
Is Income Protection Worth It for You?
Income protection is worth considering if losing your income would put your home at risk. Statutory Sick Pay is limited, government mortgage help is a loan and employer sick pay varies. For many homeowners, that leaves a real gap.
It is not right for everyone and the cost depends on factors such as your health, the cover you choose and the length of your deferred period. The key is to understand what you already have, then decide whether the remaining gap is a risk you are comfortable taking.
Everyone’s situation is different, and the right level of cover depends on your income, savings and work benefits. KingsGate Finance is based in Aldershot, Hampshire, and helps clients all over the UK with personalised, independent advice, online or by phone. If you would like to find out whether income protection makes sense alongside your mortgage, speak to one of our advisers for a friendly conversation with no obligation.
Frequently Asked Questions
How much does income protection pay out each month?
Income protection usually pays between 50% and 70% of your salary, according to Which?. The exact amount depends on the policy you choose and the premium you pay.
Can I get income protection if I am self employed?
Yes. Self employed people can take out income protection and it can be especially valuable because they cannot claim Statutory Sick Pay. A qualified adviser can help you find a policy that suits how you earn.
Is income protection the same as mortgage payment protection insurance?
No. Mortgage payment protection insurance is designed around your mortgage and can include redundancy cover. Income protection replaces part of your income if you cannot work through illness or injury, and it can pay for longer.
Does income protection cover mental health conditions?
In many cases, yes. Mental health conditions accounted for 19% of individual income protection claims paid in 2025, according to the Association of British Insurers. Cover depends on your policy terms and the health information you give when you apply.
Is income protection paid tax free?
For individual policies, usually yes. HMRC guidance says payments are generally tax free where you paid the premiums out of taxed income. The exemption has conditions, so check how your policy is set up.