Quick answer · Updated August 2026
They are fundamentally different. PPI covered specific debt repayments, was sold as an add-on (often without consent), was riddled with exclusions — and triggered £38 billion in refunds. Income protection replaces up to 65% of your salary for any illness or injury, is individually underwritten and advised, and paid roughly 90% of claims industry-wide in 2024. The scandal killed PPI; it says nothing about IP.
The Differences That Matter (August 2026)
| PPI (historic) | Income protection | |
|---|---|---|
| What it paid | A specific loan/card repayment | Up to 65% of your whole salary, tax-free |
| How it was sold | Add-on at point of credit, often unconsented | Individually underwritten, usually advised |
| Exclusions | Extensive; many policyholders could never claim | Defined at underwriting, personal to you |
| Claims record | Notoriously poor → £38bn redress | ~90% of claims paid (2024); best insurers 94%+ |
| Verdict | Rightly dead | The product advisers rate most highly |
Why the Confusion Persists — and Costs People
The PPI scandal left "payment protection" toxic, and income protection's name sits close enough that many households wrote off the wrong product. The result: the UK's biggest protection gap sits exactly where the risk is highest — long-term illness. If PPI scepticism has kept you uncovered, look at the claim-paid numbers on our provider ranking and price real IP for your situation: how quotes work.
Frequently Asked Questions
No. PPI covered specific debt repayments and was mis-sold at scale; income protection replaces your actual salary, is individually underwritten, and paid ~90% of claims in 2024. They share a word, not a design.
PPI was sold blind — no underwriting, so exclusions surfaced at claim time. IP underwrites you upfront: exclusions are agreed before you pay, which is why claims overwhelmingly succeed.
The structural failures of PPI — unconsented add-on sales, no underwriting — don't exist in advised IP. The FCA regulates the sales process, and published claim-paid rates give the product transparent accountability PPI never had.