Research from Shepherds Friendly’s Reaching the Unprotected Report 2026, based on a survey of more than 2,000 UK adults, revealed 49% of full-time workers without IP had a mortgage or loan secured against their home, while 32% were renters.
The report found uptake remains low, with just 16% of full-time workers holding a policy.
Despite the low uptake, 38% of respondents said it was likely their income would be affected by factors outside their control within the next five years, compared with 21% who believed this was unlikely.
A study from MetLife found 39% of mortgage holders had no protection policy. However, protection was often de-prioritised as consumers faced other affordability challenges.
Shepherds Friendly found inflation and rising living costs cited as the biggest threat to earnings by 68% of respondents, followed by an economic downturn (60%).
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Illness concerns high
Illness or long-term health conditions ranked third, with 51% expressing concern.
Among younger adults, health concerns were more pronounced. Almost six in 10 (58%) workers aged 18-24 said illness or injury could affect their income, highlighting what Shepherds Friendly said was the potential value of income protection for younger renters.
The report also found that more than one in five full-time workers aged 18-64 have already experienced a period out of work during which they did not receive their usual earnings. For those aged 18-24, this rose to 40%.
MetLife also found that 77% of advisers said customers actively reduced coverage or cancelled their protection policies.
Dan Simpson, chief commercial officer at Shepherds Friendly, said the findings exposed a significant protection gap among workers with major financial commitments.
“Rent and mortgage payments don’t stop when someone’s income does. Yet our research shows that many workers with these significant financial commitments have no income protection policy in place should illness or injury prevent them from working,” he said.
Simpson added that ongoing misconceptions about income protection held people back.
He continued: “There continues to be misconceptions around what IP is, what it covers, and misplaced concerns that they may not be eligible.
“Workers are increasingly aware that their financial circumstances can change beyond their control in future, yet relatively few have taken steps to protect their ability to earn an income if that happens. It continues to be our and the industry’s job to ensure people are aware of the options open to them as part of their financial resilience planning.”
