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June 1, 2026
New research¹ from LifeSearch and HomeOwners Alliance reveals that many homeowners are relying on assumptions about financial support that simply aren’t true, leaving them without income protection if they aren’t able to work.
Confusion over the role of the state, employers, redundancy pay and income protection itself are leaving households exposed if they’re unable to work
The most striking finding concerns what income protection is actually designed to cover. Almost half (47%) of homeowners wrongly believe this type of cover would pay out if they were made redundant – when it is designed for illness or injury, not job loss.
The misconception is most acute among people who have already taken out a policy: 61% of homeowners who currently hold income protection believe it would pay out in the event of redundancy – raising serious concerns about the expectations people carry into a potential claim.
Almost one in five (19%) homeowners believe income protection is unnecessary because they think they would receive sufficient government support if they were unable to work due to illness or injury. This misconception is particularly pronounced among those most financially exposed: it rises to 22% among those with a mortgage, and 42% among under-35s.
The reality is a significant distance from this assumption. Statutory Sick Pay (SSP) – the primary state support available to employees who cannot work due to illness – currently stands at around £500 a month². For most mortgage holders, that falls far short of what’s needed to cover monthly repayments and essential bills. For the self-employed, there is no entitlement to SSP at all.
Furthermore, one in six (16%) homeowners incorrectly believe that holding an income protection policy would prevent them from also claiming SSP through their employer – a figure that rises sharply (to 28%) among those who currently own an income protection policy.
More than one in five (21%) homeowners believe that if their employer provides occupational or enhanced sick pay, they have no need for income protection – a view held by 34% of under-35s. While enhanced sick pay and Group Income Protection, can provide short-term support, it is at the employer’s discretion, limited in duration, and does not move with you if you change jobs – meaning many workers lose that safety net when they move roles.
Debbie Kennedy, chief executive of protection specialist LifeSearch, said:
“Too many homeowners think they’ve got a safety net in place, when in reality, they’re relying on assumptions that don’t hold up – whether that’s expecting support if they lose their job, or overestimating what sick pay will cover.
“What we see every day is that the gaps aren’t complicated – they’re about clarity. A good adviser helps people understand how everything fits together, from state support to workplace benefits and what happens if those change or disappear when they move jobs. No one should be finding out how limited that support really is at the point they need it.’
Paula Higgins, CEO of HomeOwners Alliance, said:
““Homeowners work hard to buy their homes, but too many may be relying on assumptions about financial support that do not match reality. A mortgage is usually a household’s biggest monthly commitment, yet this research shows widespread confusion about what state support, employer sick pay and income protection actually cover.
“The most worrying finding is that nearly half of homeowners wrongly think income protection would pay out if they were made redundant. That misunderstanding could leave families badly exposed at the worst possible moment. Homeowners need clear, practical advice so they understand what protection they have, where the gaps are, and how they would keep paying the mortgage if illness or injury stopped them working.”
1. Check what your income protection actually covers
Income protection is designed for illness or injury, not redundancy or job loss. Always read your policy wording so you understand exactly when it will and won’t pay out. If you don’t currently have income protection our guide covers everything you need to know and how to get it.
2. Don’t rely on statutory sick pay alone
Statutory Sick Pay is typically around £500 per month, which is unlikely to cover mortgage payments and essential household bills. Consider whether additional protection is needed to bridge the gap.
3. Be cautious about relying on employer sick pay
Occupational sick pay can be valuable but is often temporary, varies by employer, and usually stops if you change jobs. It should be seen as part of a wider safety net, not the whole solution.
4. Check how benefits interact with insurance
Having income protection does not usually stop you claiming Statutory Sick Pay or other eligible benefits. It’s important to understand how different forms of support work together rather than assuming they cancel each other out.
5. Review your financial safety net regularly
Life changes such as moving home, changing jobs, or having children can all affect your financial resilience. Reviewing your protection annually helps ensure your cover still matches your needs.
HomeOwners Alliance partnered with LifeSearch in January 2025 to help more people access and purchase protection products. HomeOwners Alliance visitors benefit from access to a dedicated team of protection specialists who guide them through the process of securing protection, from personalised needs assessments to claims support.
LifeSearch is one of the UK’s leading protection advice specialists, blending technology with expert human advice. Since 1998, it has helped over one million people, families and businesses secure 1.7 million policies through its team of 280 specialist advisers. LifeSearch has innovated by embedding protection into wider conversations, reaching consumers in underserved markets to support its ambition to protect people properly.
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