Income Protection Calculator
If illness or injury stopped you working tomorrow, statutory sick pay alone would replace only a small fraction of most people’s income — income protection insurance is designed to close that gap, paying a regular, tax-free monthly income until you recover, retire, or the policy term ends. This calculator estimates both how much cover you could realistically get and what it might cost, based on your salary, occupation and a few other factors insurers weigh heavily.
Income Protection Calculator
Calculate how much income protection insurance you need if illness or injury stops you from working.
Estimates are indicative. Income protection premiums vary by insurer — always compare FCA-regulated policies.
Why 65% and Not 100%
Income protection cover is capped at around 65% of gross salary, not the full amount — this is a standard limit applied across the industry, not a specific insurer being ungenerous. The reasoning is deliberate: insuring 100% of income would remove any financial incentive to return to work once genuinely able to, which insurers and regulators both consider undesirable. The 65% figure is calibrated to replace a meaningful majority of income while still leaving a clear financial reason to return to work as soon as health allows.
This cap is worth understanding before assuming your full salary would be replaced if a claim were ever needed — planning around 65% as the realistic maximum, rather than 100%, gives a more accurate picture of what other savings or support might still be needed to fully cover essential costs during a genuine claim period.
The Waiting Period Trade-Off
The deferred period — how long you must be off work before payments begin — has a genuinely large, inverse effect on premium: a short deferred period of four weeks costs considerably more than a longer one of six months or a year, since the insurer is taking on risk for a much larger share of any claim period. If you have savings, sick pay from your employer, or another income buffer that could realistically cover the first few months, choosing a longer deferred period can meaningfully reduce the premium without leaving you genuinely exposed during that gap.
Checking your specific employer’s sick pay policy before choosing a deferred period is worth doing directly — some employers offer several months of full or partial pay during illness, which can comfortably bridge a longer deferred period at a meaningfully lower premium, while others offer little beyond statutory minimums, making a shorter deferred period the more appropriate, if pricier, choice.
What Statutory Sick Pay Actually Covers (And Doesn’t)
Statutory Sick Pay currently stands at £123.25 a week, a flat rate regardless of how much you actually earn — for anyone earning a moderate to high salary, this represents a small fraction of normal income, not a genuine income replacement. This calculator shows the specific monthly gap between SSP and your maximum income protection benefit, since this gap is precisely what the insurance is designed to close. For a higher earner, this gap can run into thousands of pounds a month, which puts the value of income protection into much sharper, more concrete focus than an abstract percentage figure would.
Seeing the SSP Gap in Real Numbers
On a £45,000 salary, the maximum income protection benefit works out to roughly £2,438 a month — 65% of gross salary, spread monthly. Statutory Sick Pay, at a flat £123.25 a week regardless of salary, comes to only around £534 a month. The gap between the two is stark: over £1,900 a month that SSP simply does not replace, which is precisely the shortfall income protection is designed to cover. For a higher earner, this gap widens further still, since SSP stays fixed while the potential benefit continues scaling with salary.
One Payment or Ongoing — Which Actually Fits
Income protection and critical illness cover solve related but genuinely different problems: income protection pays an ongoing monthly amount for as long as you remain unable to work, covering any qualifying illness or injury, however long recovery takes, while critical illness cover pays a single lump sum on diagnosis of one of a specific, defined list of serious conditions. A back injury keeping someone off work for eight months, for example, would likely be covered by income protection but would not trigger a critical illness payout at all, since it is not on the defined condition list — illustrating how genuinely different the two products’ actual coverage can be despite both being described loosely as “protection insurance.” Many people benefit from having both, since they cover different scenarios — a lump sum for a major, defined event, and ongoing income replacement for a wider range of illness or injury, including ones not on a critical illness list. Our Critical Illness Calculator covers that lump-sum side directly, and our Life Insurance Calculator completes the picture for the outcome none of these other products are designed to address.
Frequently Asked Questions
Are income protection payments taxable?
If you personally pay the premiums, the benefit is generally paid tax-free. If your employer pays the premiums as part of a group scheme, the benefit may be taxable as income, so it is worth checking which applies to your specific policy.
Does this cover mental health conditions?
Many modern policies do cover mental health-related absence, though this varies by insurer and sometimes by specific policy terms, so it is worth confirming this explicitly rather than assuming it is automatically included.
What happens if I change jobs or my income changes?
Most policies allow you to adjust your cover level as your income changes over time, though a significant change is worth reviewing with your insurer to ensure your cover still reflects an appropriate proportion of your current income.
Does my occupation really change the price this much?
Yes — occupation class is one of the largest factors, since physical job risk directly affects the likelihood and duration of a genuine incapacity claim, which is why an office-based role is priced very differently from physically demanding manual work.
Can the insurer cancel my cover if I make a claim?
A guaranteed premium, reviewable, or renewable policy each have different rules around this, so it is worth understanding your specific policy type — some guarantee terms cannot change after a claim, while others allow the insurer more flexibility at renewal.
Does income protection cover redundancy?
No — income protection covers inability to work due to illness or injury specifically, not job loss. Separate unemployment or redundancy cover exists for that different risk, and the two should not be assumed to overlap.
Important Information
This calculator provides an estimate for general information purposes only and does not constitute insurance or financial advice. Actual cover levels and premiums depend on full underwriting by the insurer. For advice specific to your circumstances, consult a qualified financial adviser. See our Disclaimer for further information.