What is Income Protection and How Could it Help Support a Single Mum’s Financial Future?

If you’re a single mum in the UK, you may be familiar with juggling multiple responsibilities, where you are often the primary earner, caregiver, and financial planner, all in one. In this situation, thinking about your financial security, and that of your children, can be a priority. While it’s something no one wants to dwell on, an unexpected illness or injury could affect your ability to earn an income. This is where looking into a potential financial safety net can become relevant.

One option you might want to consider is Income Protection insurance. The aim of this blog is to walk through what Income Protection is, how it typically works, and what it could mean for a single mum’s financial planning in the UK.

Direct Answer: What is Income Protection for a single mum?

Income Protection insurance is a policy designed to provide a regular monthly payment if you are unable to work because of an illness or injury, as defined by the policy. For a single mum who may be the sole provider for her family, it can be a way to help secure a portion of her income, contributing to financial stability during a period of recovery.

What is Income Protection Insurance?

At its core, Income Protection is an insurance policy you can choose to take out. In return for a monthly payment, known as a premium, the policy is designed to pay you a regular, tax-free income payment if you become medically unable to work due to an illness or injury.

It’s important to distinguish this from redundancy cover; Income Protection does not typically cover job loss for reasons other than your health. It is also different from life insurance, which is designed to pay out a lump sum upon death, or Serious Illness Cover, which pays out a lump sum upon diagnosis of a specific condition listed in the policy.

The aim of an Income Protection policy is to help bridge a potential financial gap, allowing you to focus on your recovery without the immediate pressure of losing your entire income stream. For many single parents, where there may be only one income supporting the household, this can be a key consideration.

Why Might Single Mums Consider Financial Protection?

Managing household finances alone can mean that any disruption to your income could have a significant impact. Often, a family’s needs don’t stand still, even if your earnings do. Everyday expenses like rent or mortgage payments, utility bills, food, and childcare costs continue.

Without a second income to fall back on, an extended period of illness could create financial strain. While you may have savings, these could be depleted more quickly than anticipated when used to cover all living costs.

Considering a product like Income Protection can be a proactive step in financial planning. This can be a part of looking ahead and exploring the tools available that could help safeguard your family’s financial wellbeing against unforeseen health challenges. The intention behind such a policy is to provide a degree of financial continuity, so that you can continue to meet your family’s needs while you are not earning.

How Does Income Protection Work in Practice?

If you decide that Income Protection is something you want to explore, there are a few key components to understand.

1. The Cover Amount: You can typically choose to cover up to 50-60% of your gross (pre-tax) salary. This is paid out as a monthly, tax-free sum. The reason it’s a percentage and not your full salary is to provide an incentive to return to work when you are well enough to do so.
2. The Deferment Period: This is a key component of any policy. The deferment period is the amount of time you agree to wait between becoming unable to work and the policy starting to make payments. This can range from as little as one week to as long as 12 months.
   
   Often, you might align your deferment period with any sick pay you receive from your employer. For example, if your employer provides three months of full sick pay, you might choose a three-month deferment period. Typically, the longer the deferment period you choose, the lower your monthly premiums may be.
3. The Policy Term: You can decide how long you want the policy to run for. This could be a short-term policy, designed to pay out for a maximum of 1, 2, or 5 years per claim. Alternatively, a long-term policy is designed to pay out until you are able to return to work, you retire, or the policy term ends, whichever comes first.

What About Statutory Sick Pay (SSP)?

It can be useful to understand what support might already be available. In the UK, many employees are entitled to Statutory Sick Pay (SSP) from their employer if they are too ill to work.

For the 2024/2025 tax year, the SSP rate is £116.75 per week. It can be paid for up to 28 weeks, and the rate is reviewed by the government annually.*

To qualify, you generally need to be classed as an employee and have earned, on average, at least £123 per week (the Lower Earnings Limit for the 2024/25 tax year).**

While SSP can provide some support, you might want to think about how this amount compares to your regular outgoings. For many, SSP alone may not be enough to cover all household bills and living costs, which is why some people choose to supplement it with a policy like Income Protection.

Frequently Asked Questions (FAQs)

What kind of illnesses or injuries are typically covered? Income Protection policies are generally designed to cover most illnesses or injuries that prevent you from doing your job. This can range from physical conditions, like a back injury, to mental health conditions, like stress or anxiety, provided they are medically recognised and prevent you from working. Always be sure to read the policy documents, as some pre-existing conditions may be excluded.

Can I claim more than once? Yes, most Income Protection policies allow you to make multiple claims over the life of the policy. If you successfully claim, recover, and return to work, and then fall ill again later, you can typically make another claim.

Are the payments from an Income Protection policy taxed? No, the monthly payments you receive from a personal Income Protection policy are currently tax-free in the UK.

Is it still worth considering if I have savings? This is a personal consideration. You might want to think about how long your savings would last if you had to rely on them entirely to cover your family’s expenses. An Income Protection policy is designed to provide a regular payment, which could help your savings last longer or be preserved for other life events.

Key Considerations for Your Decision
Choosing any financial product is a significant decision. It can be sensible to take the time to read all the available information. At Polly, we believe it’s about providing clear, straightforward information to help you understand your options.

An Income Protection policy is one of several tools that could contribute to a robust financial plan. For a single mum, the aim of having such protection in place is to create a buffer, helping to ensure that if you are unable to work due to illness, your family’s financial stability is supported.

Next Steps

If you feel that exploring Income Protection could be a relevant step for you and your family, you can find out more about how it works and what it might involve.

Getting a quote can give you a clearer idea of the potential costs and options available for your specific circumstances.

TL;DR (Too Long; Didn’t Read)

What it is: Income Protection is an insurance policy designed to pay you a regular, tax-free monthly sum if you can’t work due to illness or injury.

Why it can be relevant for single mums: If you are the sole earner, it can help provide financial support for your family if your income stops because of sickness.

How it works: You pay a monthly premium. If you need to claim, you’ll receive up to 50-60% of your income after a pre-agreed waiting period (the ‘deferment period’).

SSP Comparison: Statutory Sick Pay in the UK is £116.75 a week (for 2024/25). You may want to consider if this would be enough to cover your family’s costs.

Key takeaway: The aim of Income Protection is to help protect you and your children financially, allowing you to focus on getting better without the immediate worry of losing all your income.

* Statutory Sick Pay (SSP): What you’ll get.” GOV.UK, Crown, https://www.gov.uk/statutory-sick-pay/what-youll-get. Accessed 18 June 2025.

** National Insurance rates and categories.” GOV.UK, Crown, https://www.gov.uk/national-insurance-rates-and-categories. Accessed 18 June 2025.