Why start from outgoings rather than from current salary?

The benefit only needs to cover what would still need paying if your income stopped — rent or mortgage, council tax, utilities, food, debt payments, childcare and travel. Salary includes spending that could be cut in a crisis, so using it as the starting point tends to overstate what cover is actually needed. Working from essential outgoings keeps the figure grounded in what would genuinely have to be paid, which also makes the resulting number easier to defend and update later as circumstances change.

What should be subtracted before deciding on a benefit amount?

Subtract anything that would already cover part of the gap: contractual employer sick pay, checked against your actual contract rather than assumption; Statutory Sick Pay for eligible employees; savings you are genuinely prepared to commit; and any existing cover, including an employer group income protection scheme, which is commonly forgotten. What remains after those deductions is the real monthly gap a new policy needs to close, before the insurer’s own cap as a percentage of earnings is applied.

How often should the calculation be redone?

Revisit it after any change that moves the outgoings or the existing support on either side of the sum: a new mortgage or rent increase, a new child, a pay rise, a paid-off loan, or a change of employer with different contractual sick pay. Because the calculation is written down with its inputs, updating it is a matter of changing the figures that moved rather than starting again. Treating it as a one-off at the point of buying cover risks the benefit drifting away from the real gap over the years.

Income protection

How much income protection do I need?

The short answer

Add up the monthly outgoings that would continue if your income stopped — housing, utilities, food, debts, dependants. Then subtract employer sick pay, Statutory Sick Pay, savings you would commit and any existing cover. The gap, subject to the insurer’s cap as a percentage of your earnings, is the benefit worth quoting for.

Written by Andrew Buscu. Reviewed by Parvoz Haydarov.

Published 15 September 2026. Last reviewed 15 September 2026. Next review due 15 December 2026.

What to know about working out how much income protection you need

Start from essential monthly outgoings that would continue if your income stopped, not your salary. Read more
Subtract employer sick pay, Statutory Sick Pay, usable savings and any existing cover. Read more
The remaining gap is capped by the insurer at a percentage of your earnings. Read more
A written calculation is easy to revisit after a mortgage, pay rise or new dependant. Read more

Thinking about working out how much income protection you need

What works well

The needs method ties cover to real outgoings, not round numbers.
Subtracting sick pay and existing cover avoids paying twice.
A written calculation is easy to review and update.

What to watch

Employer sick pay ends when the job does.
Statutory Sick Pay stops after 28 weeks.
The benefit cap can sit below the gap you calculate.

The arithmetic, in the right order

Start with the essentials: list the monthly outgoings that would not stop if you could not work — rent or mortgage, council tax, utilities, food, debt payments, childcare and travel. That total, not your salary, is the number the benefit needs to approach. Then subtract what already exists: contractual employer sick pay (check your contract, not your assumptions, and note when it steps down), Statutory Sick Pay at £123.25 a week for eligible employees for up to 28 weeks, savings you are genuinely prepared to commit, and any cover you already hold — including an employer group income protection scheme, which many people forget they have. The remainder is the monthly gap. Finally, apply the insurer’s cap: policies limit the benefit to a percentage of your earnings, so the figure you can buy may be lower than the gap you calculated — which is when the deferred period and your savings do the rest of the work.

Write the calculation down with dates and sources, and revisit it after every major change — a new mortgage, a new child, a pay rise or a paid-off loan all move the number. Whatever the specifics of working out how much income protection you need, the discipline that protects you is always the same: get the insurer’s position in writing, keep the documents with the policy, and make sure the people who would help you claim know the policy exists and where the paperwork lives.

Related guides

Common questions

Why start from outgoings rather than from current salary?: The benefit only needs to cover what would still need paying if your income stopped — rent or mortgage, council tax, utilities, food, debt payments, childcare and travel. Salary includes spending that could be cut in a crisis, so using it as the starting point tends to overstate what cover is actually needed. Working from essential outgoings keeps the figure grounded in what would genuinely have to be paid, which also makes the resulting number easier to defend and update later as circumstances change.
What should be subtracted before deciding on a benefit amount?: Subtract anything that would already cover part of the gap: contractual employer sick pay, checked against your actual contract rather than assumption; Statutory Sick Pay for eligible employees; savings you are genuinely prepared to commit; and any existing cover, including an employer group income protection scheme, which is commonly forgotten. What remains after those deductions is the real monthly gap a new policy needs to close, before the insurer’s own cap as a percentage of earnings is applied.
How often should the calculation be redone?: Revisit it after any change that moves the outgoings or the existing support on either side of the sum: a new mortgage or rent increase, a new child, a pay rise, a paid-off loan, or a change of employer with different contractual sick pay. Because the calculation is written down with its inputs, updating it is a matter of changing the figures that moved rather than starting again. Treating it as a one-off at the point of buying cover risks the benefit drifting away from the real gap over the years.