Income Protection in 2027
How income protection works, how to choose a deferred period and definition, and how it fits with sick pay, state support and your mortgage.
- What income protection is and who it suits
- Deferred period: the wait before payments start
- The definition of incapacity: own occupation and others
- How much you can insure and how long it pays
- Sick pay, state support and the gap to fill
- Self-employed people and company directors
- Tax, mental health and the link with your mortgage
- Costs and what may change in 2027
- Tips and tricks, common mistakes and a checklist
- How OMB can support you
The short version
Income protection pays a monthly income if illness or injury stops you working, after a waiting period you choose. It is not limited to a list of conditions, and benefits from a personally paid policy are usually tax-free. This guide explains the choices that matter and how it fits with state and employer support.
- The deferred period is the wait before payments start, and a longer wait usually lowers the cost.
- Own occupation is generally the strongest definition, but not every insurer offers it for every job.
- Insurers usually cap the benefit at a share of your earnings, commonly around 50 to 65 percent, and the exact limit varies.
- Statutory Sick Pay is £123.25 a week from April 2026, which will not cover most mortgages and bills.
- Self-employed people and directors can be covered, but how income is assessed differs by insurer.
Start with your gap
compare monthly outgoings with sick pay and savings, then choose the deferred period.
What the full guide covers
- What income protection is and who it suits
- Deferred period: the wait before payments start
- The definition of incapacity: own occupation and others
- How much you can insure and how long it pays
- Sick pay, state support and the gap to fill
- Self-employed people and company directors
- Tax, mental health and the link with your mortgage
- Costs and what may change in 2027
- Tips and tricks (8), common mistakes (6) and a 11 point checklist
- How OMB can support you, with a fictional worked example
Illustrative example: a self-employed main earner
Sam is a self-employed designer and the main earner in a household with a repayment mortgage. He has no sick pay, and savings that would cover about three months of outgoings. After a review, he chooses a 13-week deferred period with an own occupation definition and benefit payable to retirement, and he keeps the benefit within the limit his insurer sets. He reviews it each time his income changes. Sam is fictional, the example is illustrative only, and cover depends on underwriting and policy terms.
Names, figures and circumstances are fictional and illustrative only. They do not represent an actual client of Our Mortgage Broker Limited.
Income Protection in 2027
How income protection works, how to choose a deferred period and definition, and how it fits with sick pay, state support and your mortgage.
Want to talk it through?
Income protection is one of the more complex protection products, and the details matter more than the price. We review your sick pay, savings and outgoings and then compare insurers across the whole of the market. We charge no fee for protection advice and receive commission from the insurer, which we confirm before you proceed.
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Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Our Mortgage Broker Limited is authorised and regulated by the Financial Conduct Authority (FRN 944663). Registered in England and Wales, company no. 11358646. Registered office: 23 Berkeley Square, Mayfair, London W1J 6HE. There may be a fee for mortgage advice: we may charge up to 1% of the loan amount, and our typical fee is £500. Your fee agreement sets out the exact fee and when it is payable (at decision in principle, application or mortgage offer); fees are not refundable once due. We usually also receive commission from the lender. Protection and insurance products are subject to underwriting and the policy terms and conditions. This guide is general information only and is not personal advice. Case studies are fictional, illustrative examples and do not represent real clients. Rates, tax and regulatory information are correct as at October 2026 and may change, including at the Autumn Budget on 28 October 2026.