By Sam Noble, Protection Adviser at The Mortgage Broker.
Yes, income protection can still be worth considering when you have sick pay and savings. But that does not mean everyone needs it. If your employer’s scheme, a partner’s earnings and money you can readily access would cover your bills during a long illness, another policy might add little. If they would not, it is worth looking at the gap.
“Six months’ sick pay” sounds reassuring. But is that six months on full salary, or a period of full pay followed by half pay? There is a big difference when your mortgage or rent and the rest of the household bills are still due.
This guide looks at personal income protection for UK employees who cannot work because of illness or injury. It does not cover redundancy insurance. The details of your own employer scheme and any policy you already have will matter.
Check what sick pay you actually get
Statutory Sick Pay (SSP) is the legal minimum for eligible employees. Your employer may offer more through company or contractual sick pay. Some schemes pay full salary for a while and then reduce it. Others provide little beyond SSP. As Acas explains, the amount, duration and any discretionary conditions should be set out in the contract or sickness policy.
Ask HR or payroll for the written terms. Check whether “half pay” includes commission or regular overtime, whether you need a minimum length of service, whether earlier absences affect your entitlement, and whether the employer also provides group income protection. A generous-sounding headline is not enough to plan your finances.
What changed to Statutory Sick Pay in April 2026?
From 6 April 2026, eligible employees can receive SSP from their first full qualifying day of sickness. The previous three waiting days and lower earnings threshold were removed. In the 2026/27 tax year, the rate is £123.25 a week or 80% of average weekly earnings, whichever is lower, for up to 28 weeks. It is paid by your employer through payroll and can be subject to tax and National Insurance. See GOV.UK’s current SSP rules and HMRC’s guidance on the April 2026 change.
Crucially, SSP is not usually another 28 weeks that starts when your company sick pay ends. Both can apply to the same period. HMRC confirms that employers can offset SSP against occupational sick pay, rather than simply adding the two amounts together. There are separate transitional arrangements for some sickness absences that began before 6 April 2026.
What happens when full pay drops to half pay?
Your bills do not reduce just because your income does. Compare what would actually reach your bank account at each stage of sick leave with the essential costs you would still have to pay: mortgage or rent, council tax, utilities, food, childcare, transport, debt repayments and any unavoidable care costs. You may be able to cut other spending, but be realistic about what can go.
Check your workplace pension, too. Contributions may shrink as sick pay falls, affecting what you build up for retirement. They do not automatically stop on half pay or SSP.
MoneyHelper explains that contributions will usually continue while you are receiving sick pay, although the amounts can change, and may stop if pay stops. Ask payroll and your pension provider how your scheme handles both your contributions and the employer’s.
A household example: when the savings start to run down
Take a hypothetical two-income household. One person normally brings home £2,800 a month, their partner brings home £1,600, and essential household spending is £3,300. They have £6,000 in accessible savings. The first person’s employer provides eight weeks of full pay, followed by eight weeks of reduced pay, then SSP only while eligible.
For this illustration, reduced sick pay means £1,600 a month take-home and SSP-only means approximately £500 a month take-home. These are assumptions, not calculated payslips. The maximum 2026/27 SSP rate of £123.25 weekly is about £534 gross per calendar month before any deductions. The partner’s earnings and essential costs are assumed to stay the same.
| Period of absence | Employee income / month | Partner income / month | IP benefit / month | Against £3,300 essentials |
|---|---|---|---|---|
| Weeks 1–8: full sick pay | £2,800 | £1,600 | £0 | £1,100 surplus |
| Weeks 9–16: reduced pay | £1,600 | £1,600 | £0 | £100 shortfall |
| Weeks 17–28: SSP only | £500 assumed net | £1,600 | £0 | £1,200 shortfall |
| After week 28: no IP | £0 | £1,600 | £0 | £1,700 shortfall |
| After week 28: eligible IP claim in payment | £0 | £1,600 | £1,200 illustrative | £500 shortfall |
The last row is a separate “what if” comparison. It assumes a personal policy could pay £1,200 a month and that a successful claim was already being paid. It is not a policy quotation or a promise that payments would start in week 29. The insurer’s rules, financial limits, claim assessment and payment schedule would determine the actual outcome.
How long would £6,000 of savings last?
Assume the household uses its full-pay surplus for ordinary spending rather than adding it to savings. Over roughly eight weeks of reduced pay, it draws about £185 from savings. The following 12 weeks on SSP-only income use another £3,323. That leaves about £2,500 when SSP ends. These calculations convert weeks to months using 52 weeks divided by 12; the figures are rounded.
At that point, a £1,700 monthly gap would exhaust £2,500 in about one and a half months. If an accepted £1,200 monthly policy benefit were already arriving, the remaining gap would be £500 and the same savings could last about five months. In reality the first insurance payment could come later, other costs might arise and no benefit is guaranteed.
Could your savings and your partner’s income be enough?
Absolutely. If another reliable household income can meet the essential bills, the shortfall might be small or even zero. Long-term employer benefits or an existing income protection policy might already provide enough support. MoneyHelper recognises that good sick pay, sufficient savings or a partner who can cover household costs may make a separate policy unnecessary.
For a quick first check, divide the savings you could genuinely use by the monthly shortfall after other dependable income. For example, £5,000 divided by a £1,000 gap is about five months. Then ask what happens if your illness lasts longer, your partner needs to reduce working hours to care for someone, or your savings are needed for something else.
Do not count money that is already committed to tax, a house move or a necessary repair. Investments might also take time to sell or lose value. And if the plan would use up your entire emergency fund, that is worth acknowledging rather than treating all savings as freely available.
When would income protection actually start paying?
An income protection deferred period is the period you must meet the insurer’s definition of being unable to work before benefit becomes payable. It normally runs from the qualifying absence, not from the day your employer stops paying you. So a policy with a 26-week deferred period does not automatically fit a job that pays full salary for eight weeks and reduced salary for another eight.
Aviva suggests choosing the waiting period with employer sick pay and available savings in mind. Some policies have options for different benefit levels to begin at different times; for example, Legal & General describes a stepped benefit option. Whether payments are reduced because of continuing sick pay or other income is set out in the actual policy terms.
Also check when the first money would reach your account. LV= explains that its standard income protection claim payments are made monthly in arrears, after the waiting period. A claim may require medical and earnings evidence. Your cash buffer needs to cover that timing, not simply the number of weeks printed on a quotation.
Finally, ask how long a claim could be paid. Some policies limit payments for each claim to a set number of months or years. Others could pay for longer, subject to the policy end date and conditions. Cover that helps for a year is not the same as cover that could support a much longer period away from work.
When might another policy not be needed?
You may already be well covered. Perhaps your employer provides extended paid leave and a group income protection scheme. Perhaps you have an existing personal policy. Or perhaps the rest of the household income pays the essential bills without needing to use savings. In those cases, paying for extra cover might not be worthwhile.
There is more reason to explore personal cover when reduced sick pay starts early, a mortgage or rent payment relies heavily on one salary, your emergency fund would soon be exhausted, or your workplace benefit might end if you leave your employer. That does not make a policy the automatic answer. Its cost, exclusions, benefit limits and whether the cover is affordable all matter.
If you are also considering critical illness cover, our guide explains the difference between income protection and critical illness cover.
Five checks before deciding
- Get the written sick-pay schedule from HR, including full pay, reduced pay, SSP and any workplace income protection.
- List the essential monthly bills you would still pay and the take-home income the household could rely on.
- Separate truly accessible savings from money set aside for another important purpose.
- Check a short absence and a long one. Include what happens to your pension contributions and when employer support ends.
- If a gap remains, compare any policy’s benefit, waiting period, payment period, exclusions and premium before deciding.
Questions people often ask
Does SSP start when company sick pay runs out?
Usually not. SSP entitlement can run at the same time as company sick pay, with the employer offsetting it against the contractual payment. Ask payroll for the start and end dates. Previous linked absences and pre-April 2026 absences can make the calculation less straightforward.
If I have six months of savings, do I still need income protection?
You might not. The important detail is whether those savings cover six months of all your spending or six months of the gap after sick pay and other household income. Also consider what you would have left for other emergencies.
What if work already gives me group income protection?
Check the benefit amount, waiting period, how long it could continue, the definition of incapacity and what happens if you change or leave your job. Group cover might fill the gap, but the employer’s scheme document is what matters. Do not cancel an existing personal policy before comparing its terms with any replacement.
What happens if I am still ill when SSP ends?
You might qualify for New Style Employment and Support Allowance (ESA) or Universal Credit, depending on your circumstances. They are not automatic replacements for your wages. GOV.UK explains what to do if SSP ends and when you can apply for New Style ESA. Ask your employer about form SSP1 in good time.
Work out the gap before deciding on cover
At The Mortgage Broker, a protection review starts with what you already have. We can go through your sick pay, existing cover, savings, other household income and commitments, and explain where there may be a shortfall. You might decide to keep your current arrangements, consider additional cover or take no new policy at all. You can also read about our income protection advice service.
Personal income protection is subject to eligibility, medical and financial underwriting, the policy’s incapacity definition, exclusions and benefit limits. It is not redundancy cover. Premiums apply, and cover may end if you stop paying them. For insurance business, we offer products from a range of insurers.
About this guide
Applies to: UK employees considering personal income protection alongside employer sick pay, savings and other household income. Sources checked: 24 October 2026. This is general information, not a personal insurance, pensions, benefits or employment-law recommendation. Your employer’s terms and the accepted policy documents determine your position.
The Mortgage Broker is a trading name of The Mortgage Broker (London) Limited, an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited, which are authorised and regulated by the Financial Conduct Authority.
View all posts by Jack 
