Income Protection vs Sick Pay — Which Do You Need? UK 2 | Li
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Income Protection vs Sick Pay: What's the Difference?

Sick pay from your employer eventually runs out. Income protection picks up where it leaves off — and can last for years. Here's how to compare.

8 min read Published March 2026

What sick pay are you entitled to?

Most UK employees receive some form of sick pay when they can't work:

  • Statutory Sick Pay (SSP) — £123.25/week (2026/27) for up to 28 weeks, paid by your employer if you earn above the lower earnings limit.
  • Employer sick pay — Many employers top up SSP with full or partial salary for a period (commonly 1–6 months, sometimes longer for more senior employees).
The gap: SSP runs out after 28 weeks. Most employer sick pay runs out after 3–6 months. After that, you're relying on savings or state benefits — unless you have income protection.

What happens when sick pay runs out?

When sick pay ends, you face a significant income drop. Your options are:

  • Draw on savings
  • Apply for Universal Credit or Employment and Support Allowance (ESA)
  • Rely on a partner's income
  • Claim on income protection insurance

State benefits are means-tested and may not cover your mortgage or rent. Universal Credit for a single person is roughly £370–£400/month — far below most people's essential outgoings.

How income protection fills the gap

Income protection can be set up with a deferred period that matches when your sick pay ends. For example:

  • Employer sick pay lasts 3 months → set a 13-week deferred period
  • Employer sick pay lasts 6 months → set a 26-week deferred period

This way, income protection picks up exactly when your employer provision stops — and you only pay for the insurance you actually need.

What about self-employed people?

The self-employed receive no SSP and no employer sick pay. They are entirely reliant on savings or income protection from day one of sickness. A short deferred period (4–8 weeks) is often appropriate for self-employed applicants.

How much does income protection pay?

Most policies replace 50–70% of gross income, paid monthly, tax-free. This is enough to cover essential outgoings for most people while they recover.

Frequently Asked Questions

Yes — and it's still worth considering. Employer sick pay is not guaranteed to stay the same if you change jobs or your employer's policy changes. Income protection is yours regardless.

In 2026/27, SSP is £123.25 per week for up to 28 weeks. It is paid by your employer if you earn above the lower earnings limit (currently £123/week).

It depends. If you have 6–12 months of outgoings saved, a longer deferred period can reduce your premiums significantly. But most people don't have enough savings to cover a 5-year illness — which is where income protection becomes essential.

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