Skipping income protection is a bit like running without tying your shoelaces Why? Gregor Sked, senior protection development and technical manager at Royal London explains.
Discussions about financial inclusion frequently focus on savings, pensions, and investments. While these factors contribute to long-term financial stability, they may not address an important issue of individuals’ resilience to immediate income shocks.
According to Royal London’s 2025 Financial Resilience Report, one in five UK adults has less than £100 in cash savings, a proportion that has remained stable since 2023. This limited financial safety net leaves millions susceptible to unforeseen expenses. Notably, 28% of individuals in mid-life report they could manage for only up to one month if unable to work due to illness, in contrast to 20% of all working adults.
This is where income protection should come in. Yet it remains one of the least discussed areas of advice, despite being a vital tool in helping people stay financially afloat when life takes an unexpected turn. If we are serious about inclusion in financial services, we need to broaden the conversation beyond long-term saving and ensure financial resilience is part of the picture.
Who is most exposed?
Royal London’s research indicates that financial resilience varies across different groups. Certain groups are more susceptible to income disruptions:
- Females – frequently employed in sectors with limited sick pay and more likely to take career breaks
- Single parents and singles – 24% of singles and 19% of those living alone have no savings
- Gig economy and self-employed workers – typically do not receive employer benefits and face irregular income patterns
- Renters – especially single renters, who had an average increase in housing costs of £218 a month in the 12 months to February
- Ethnic minority households – statistically more likely to have lower savings and higher financial instability
These groups have a greater potential need for income protection but are less likely to access it.
Shifting the perception of protection
Income protection is sometimes seen as a ‘nice to have’. But this framing misses the point that those with the least financial resilience have the most to lose from an income shock. Someone once said to me that skipping income protection is a bit like heading out for a run without tying your shoelaces. You might get away with it for a while, but sooner or later, you’re likely to trip up and often when you least expect it. The consequences can be far more disruptive than the small effort it would have taken to prepare properly.
So why do so many people leave themselves exposed? Many people remain unprotected due to optimism bias, ‘it won’t happen to me’, affordability concerns, or a lack of awareness that such cover exists and how it works. Advisers and paraplanners are uniquely placed to challenge these assumptions and help clients see protection as a foundation, not an afterthought.
Paraplanners play a pivotal role in identifying and addressing gaps in client protection. With only 7% of mid-lifers holding income protection, and millions lacking a financial buffer, the need for robust analysis and tailored recommendations is clear. For self‑employed and gig workers, shorter deferred periods and return‑to‑work support will typically be of more valuable than marginally lower premiums. Renters and single‑income households may prioritise indexation to keep pace with rising housing costs. Females and career breakers might benefit from own‑occupation definitions and minimum benefit guarantees (where available) to protect future flexibility.
Protection as part of the inclusion agenda
Inclusion is about more than access to financial products; it’s about ensuring people can withstand the bumps in the road as well as plan for the long term. Initiatives like auto-enrolment have successfully widened pension participation, but there’s no automatic equivalent when it comes to protecting income. That makes adviser intervention even more critical.
By reframing income protection as a foundation of financial inclusion, advisers and paraplanners can help close a gap that has been overlooked for too long. In doing so, it can not only deliver better client outcomes but also build resilience into the wider financial system.
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