Your income
From April 2026, Statutory Sick Pay is £123.25 a week (or 80% of your average weekly earnings if that’s less), paid from your first day off sick, for up to 28 weeks. Some employers pay more: check your contract.
- Your pay
- £576.92
- Statutory Sick Pay
- £123.25
Statutory Sick Pay replaces about 21% of your pay: £453.67 a week less
Statutory Sick Pay is paid from your first day off sick, for up to 28 weeks. Check your contract: many employers pay more for a while.
After that, or if you’re self-employed, you’d rely on savings and benefits such as Universal Credit or New Style Employment and Support Allowance. Two kinds of cover fill the gap:
- Income protection insurance pays a share of your income, often 50% to 70%, if you can’t work because of illness or injury, until you’re well, retire or the policy ends. You choose a waiting period before it starts: matching it to your sick pay, or to your emergency fund, keeps the cost down. It’s the cover most people overlook.
- Critical illness cover pays a lump sum if you’re diagnosed with one of the serious illnesses the policy lists. Check the list and what counts.
Health
The NHS covers most health care. Private medical insurance can mean quicker treatment, and some employers include it, but it isn’t essential for most people. If your employer pays for it, it’s usually a taxable benefit, so you pay Income Tax on its value.
Life insurance
Term life insurance pays out if you die during the term, and is usually cheap if you’re young and healthy. If you have a mortgage or children, it’s worth considering. Decreasing term cover, where the payout falls as a repayment mortgage shrinks, costs less than level term, which pays the same throughout.
Your employer may offer death in service cover, often several times your salary, but it ends if you leave.
A common starting point is enough to clear your debts and cover your family’s living costs for several years. Ask for the policy to be written in trust: it can then pay out without waiting for probate, and usually stays outside your estate for Inheritance Tax.
Home, car and travel
- Car insurance is a legal requirement: at least third party cover.
- Buildings insurance is required by your mortgage lender. In a leasehold flat, the freeholder usually insures the building and you pay through the service charge.
- Contents insurance covers your belongings, whether you own or rent, and is usually cheap.
- Travel insurance is worth having for trips abroad. A free Global Health Insurance Card (GHIC) gets you state healthcare in the EU, but it isn’t a substitute: it doesn’t cover bringing you home or cancelled trips.
What you can usually skip
- Extended warranties and gadget insurance: an emergency fund does the same job, and you keep the money if nothing breaks.
- Cover you already have: check what your job, packaged bank account, credit card and existing policies include before buying more.
- Low excesses: choosing a higher excess lowers your premium, if you could pay it.
Paying less
- Shop around at renewal. For home and car insurance, your insurer can’t charge you more to renew than it would a new customer, but another insurer may still be cheaper.
- Pay yearly if you can: paying monthly often costs more, because it’s a loan.
- Tell the truth on applications: a claim can be refused if you didn’t mention something.
- Review your cover when life changes: a new job, partner, baby or home.
If a claim is turned down and you think that’s wrong, complain to the insurer first. If you’re not happy with its final answer, or it hasn’t replied within eight weeks, you can take it to the Financial Ombudsman Service for free.