85% of UK income protection needs still not covered, report reveals
The report from the IPTF and Iress found the market grew by 7% compared to last year, with application volumes up 56% since 2022.
85% of income protection (IP) needs in the UK are not covered, according to the latest Profile of an IP Customer report from the Income Protection Task Force (IPTF) and Iress.
The market grew by 7% compared to last year, with application volumes up 56% since 2022.
Multi-benefit plans made up 49% of all income protection benefit applications, with 88% of these buyers aged 45 or under.
The most common age range for buying a multi-benefit plan was 26–35.
The report also showed that 76% of people have no IP in place.
The average monthly benefit amount still fell over £1,200 short of the average monthly spend for mortgage-holding households.
While 41% of UK adults felt financially protected, only 19% had enough cover, leaving a 22% gap between perception and reality.
Women were 25% more likely to take out income protection as part of a multi-benefit plan, but uptake among women for standalone cover remained low.
Vicky Churcher, executive director at the IPTF, said: “While more people are engaging with protection, too many still remain under-protected, under-informed, or unsure whether the cover they have is enough.
“For the IPTF, that makes this report more than a snapshot of market activity.
“It is a practical tool for advisers, providers and the wider industry to better understand today’s customer and help turn awareness into meaningful financial resilience.”
The report also found the age profile of income protection buyers is getting younger, with over 70% of individual policies now running into retirement.
The most common end-of-mortgage ages are now 68, 69 and 74.
Jane Irwin, protection product lead at Iress, said: “More than 85% of income protection needs in the UK remain unmet, highlighting the scale of the protection gap and the significant opportunity for the industry to better support customers.
“Through the data and insights underpinning this third edition, we hope to help the market better understand evolving consumer needs and continue driving meaningful change.
“We have already seen tangible improvements in adviser behaviour and product design as a direct result of our previous reports, and we are proud to continue supporting the work of the IPTF by delivering the market intelligence that helps shape real progress in the protection industry.”
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