New research from Shepherds Friendly shows that income protection (IP) remains one of the least-used forms of cover, even though most UK workers know it exists.
Only 14% of full-time workers have IP, despite 70% being aware of it. Uptake is highest among 25–34-year-olds but drops sharply with age.
The study found that the main barrier isn’t awareness — it’s misunderstanding:
- Many workers wrongly believe past health issues, chronic conditions or lifestyle habits mean they will be automatically declined.
- Almost a third think a mental-health condition would prevent an application being accepted.
- There’s confusion about what IP actually covers: while most know it pays out for illness or injury, 42% mistakenly think it covers redundancy.
The research also highlights gaps in understanding of existing safety nets.
69% of workers don’t know the level of statutory sick pay, and many don’t receive any additional employer sick pay.
According to the ABI, 97% of income protection policies are taken out with advice, underlining the role of advisers in clearing up misconceptions and helping clients understand how IP fits into their wider financial resilience plan.
Younger workers, in particular, value clear communication, simple explanations, and transparency around costs. Many also show a growing interest in mutual providers.