How protected are UK workers?

In today's uncertain economic climate, financial resilience is more crucial than ever. In a recent report*, an impressive 69% of UK workers said they feel very financially resilient – up 4% since last year. Despite this, only 52% hold a protection policy, which leaves a significant portion of the workforce inadequately covered.

Many workers unprotected

The average household debt is £20,640 (excluding mortgages) and this rises to £28,908 for the self-employed population. The average worker has three people who are dependent on their income, yet only 7% have a protection policy in place that they pay for themselves. Also, 42% of UK households would only be able to survive for up to three months if they did not have an income. So, a concerning number of people could potentially find themselves in a vulnerable financial position if they are unable to work.

What’s your plan B?

Workers were asked how they would cope if they could not work for two months or more and 47% said they would fall back on their savings. Meanwhile, 32% would use sick pay from their employer, and 19% planned to rely on their partner.  But, with the right income protection insurance in place, there is no need to exhaust your savings pot or put your partner under unnecessary financial strain. Instead, your insurer will pay out a monthly amount until the term ends or you return to work.

Don’t rely on sick pay

One in five employed workers did not know what their sick pay arrangements were. Meanwhile, just over half of those who thought they were entitled to sick pay realised they were actually only entitled to support for 12 weeks or less. Even though sick pay is a valuable safety net, it’s not likely to be enough to help you pay your bills in the long run; for the tax year ending 5 April 2025, the weekly rate for Statutory Sick Pay is £116.75.

Self-employed population

It is perhaps unsurprising that self-employed people seem to be more financially vulnerable, with 19% saying they would have to continue working if they’re ill or injured, compared to 12% of those who are employed. One in four self-employed people have savings of less than £1,000, while 29% could manage for less than a month if they were unable to work. As a result, 17% would have to rely on their parents for financial support.

Get informed, get covered

It seems that, while financial confidence among UK workers is on the rise, this does not necessarily mean that the UK population is adequately protected. Mike Farrell, Protection Sales and Marketing Director at LV, commented, “While it’s encouraging to see financial confidence on the rise, our findings show that the right protection could further strengthen this sense of security.”

As with all insurance policies, conditions and exclusions will apply

* LV, 2025