Across the UK, the financial safety net that once protected workers during periods of illness or incapacity is under growing strain. Government welfare spending has risen sharply in recent years, prompting reforms designed to reduce the burden on the state and tighten eligibility for long-term benefits.
For employees, this means that relying on government support in the event of long-term sickness may no longer be enough. And yet few people consider what would happen if they were unable to work for several months or more. Most have limited savings, little awareness of their employer’s sick-pay policy, and often, a belief that “it won’t happen to me.”
For employers, this changing environment creates both a challenge and an opportunity to protect their people against income loss, demonstrate genuine care, and strengthen engagement through well-designed income protection benefits.
The unspoken risk: “It won’t happen to me”
Most employees never imagine being unable to work for an extended period. Yet the statistics tell a different story. Illness and injury account for a significant proportion of long-term absences every year, and most households simply aren’t equipped to cope financially.
Many UK households are financially fragile. A 2025 survey found UK adults hold on average about £16,067 in savings, with 39% having £1,000 or less, meaning for many, their savings would cover only a month or so of income loss.
At the same time, employee awareness of sick-pay entitlements is low. One survey by Direct Line found just 4% of workers understand how much they would receive under statutory sick pay.
And though the current statutory sick-pay rate is set at £118.75 per week (for up to 28 weeks), many employees do not appreciate how quickly income can drop if absence extends beyond that point.
That’s when the uncomfortable questions arise: Could I keep up with my bills? Can I pay my mortgage? Keep the car?
For most people, the honest answer is “probably not.”
A role for employers: standing by your people
Against this backdrop, employer-sponsored income protection is no longer just a nice-to-have benefit. It’s a practical demonstration of a company’s commitment to its people and a vital financial safety net when the state can no longer be relied upon.
Group income protection (GIP) provides employees with a regular income if they’re unable to work due to illness or injury, usually as a percentage of salary. It can continue for years, ensuring that the employee’s family doesn’t face financial collapse during a health crisis.
For employers, the benefits extend beyond the purely financial:
- Loyalty and engagement. Employees who know their employer is committed to their health and well-being are more likely to feel secure and committed.
- Attraction and retention. In a competitive labour market, being seen as a caring, responsible employer is a differentiator.
- Operational stability. Absence and return-to-work support (often built into GIP) help reduce the disruption of long-term sickness.
“But won’t it encourage people to go off sick?”
A common concern among employers is that promoting income protection might encourage absence or claims. In practice, the opposite tends to be true.
Modern income protection policies are tightly managed, with robust claims processes and active rehabilitation support to help employees return to work safely and quickly. Communication can focus on reassurance rather than encouragement.
Handled well, the message isn’t about granting time off; it’s about demonstrating care, security, and responsible planning.
Make group income protection work for you
If you already offer income protection, now’s the time to review how it’s structured and, crucially, how it’s communicated.
- Keep it simple. Explain in plain language what it does, for example, “If you can’t work because of illness or injury, you’ll continue to receive X% of your salary after Y weeks.”
- Integrate with your absence policy. Make sure HR, line managers and employees all understand the link between sick pay and income protection.
- Use real-life examples to make the concept tangible and prompt people to ask the right questions.
- Show how income protection fits alongside health, mental well-being and early-intervention support.
- Communicate regularly and don’t bury it in a benefits brochure. Include reminders in onboarding, benefits reviews and wellbeing campaigns.
Done well, this becomes a cornerstone of your company’s well-being promise, one that genuinely protects livelihoods.
A powerful message of care
When the government’s safety net is tightening, employers who step up with their own form of protection send a clear and powerful message “We look after our people, even when life doesn’t go to plan”.
That message builds trust, loyalty and long-term engagement. It also helps employees weather some of the most challenging moments of their lives, without the added stress of financial insecurity.
Because the truth is, incapacity can happen to anyone. The question is whether, when it does, your employees will have a safety net strong enough to hold them.
Are you supporting your employees with group income protection?
Now is the time to review your sick-pay and income-protection policies. At Bespoke Benefits, we specialise in helping businesses create tailored employee benefit schemes that strike the right balance between protection and practicality. We can help you assess how your benefit aligns with current welfare reform, and most importantly, make sure your people know it’s there.
Get in touch with our friendly team today for a no-obligation chat about how we can support your business and your people.
This article is for informational purposes only and does not constitute financial, medical, or legal advice. The information provided reflects general trends and insights as of the date of publication and may not apply to all circumstances. For income protection insurance or employee benefits, we recommend consulting with a qualified professional or insurance advisor.
