Do You Need to Protect Your Income or Will the Government Look After You?

Myth: I don’t need cover, the government will look after me.

If you couldn’t work tomorrow, would the government cover your bills? And if you weren’t here tomorrow, would your family be financially secure?

It’s not the cheeriest thing to think about over your morning coffee, we know. But they’re important questions, and lots of us put off answering them.

When it comes to life insurance, income protection and critical illness cover, we often hear the same reply: “I’ll be alright. The government will help me.”

And to be fair, there is support available. The government provides benefits for people who can’t work, who are seriously ill, or who’ve lost someone. But here’s the bit worth thinking about: government support can help you get by. It doesn’t necessarily mean you can keep the life you’ve built.

“If I can’t work, I’ll get sick pay”

Possibly. But how much, and for how long?

If you’re eligible, Statutory Sick Pay is currently £123.25 a week, or 80% of your average weekly earnings if that’s lower, for up to 28 weeks.(1) That’s around £534 a month before tax and National Insurance. Some employers pay more, so it’s worth checking your contract.

Now imagine your usual income is £2,500 a month. Sick pay at the full rate would be roughly a fifth of that. Your mortgage or rent still needs paying. So do the energy bills, the car finance, the food shop and the childcare. And if you can’t go back to work before your sick pay runs out, the pressure builds quickly.

Income protection is designed to help bridge that gap, with a regular income if you can’t work because of illness or injury, subject to the policy’s terms, waiting period and benefit limits.

“I’ll just claim Universal Credit”

Universal Credit can be valuable support, but it isn’t a replacement for your salary.

In 2026/27, the standard monthly allowance is £424.90 for a single person aged 25 or over, and £666.97 for a couple where either partner is 25 or over.(2) These are standard allowances, not necessarily what you’ll receive. Additional amounts may apply, and your savings, housing costs and household income can all affect it. That includes a partner’s earnings, because Universal Credit looks at the household, not just you.

So it’s worth checking what you’d actually be entitled to, rather than assuming it would cover your usual outgoings.

“If I get seriously ill, the NHS and government will help me”

The NHS provides essential healthcare, and there may be benefits if a health condition affects your ability to work. But medical treatment and financial protection are two different things.

Even when treatment is available, you might still face time away from work, reduced earnings, travel costs or extra care needs. Critical illness cover is designed to pay a lump sum if you’re diagnosed with a condition covered by the policy and meet its claim criteria. Depending on your cover, that money could help with the mortgage, household bills, adapting your home, or simply some breathing space while you recover.

It isn’t a replacement for medical care, and not every illness will qualify for a payout. But it can be another layer of support when you may need it most.

“If I die, the government will look after my family”

This is perhaps the biggest misconception of all.

Would your partner be able to afford the mortgage or rent on their own? Could they manage the bills? Would your children still have the opportunities you’ve worked hard to give them?

There is some government support after a bereavement, but eligibility is limited and the payments are small. In 2026/27, an eligible partner may receive Bereavement Support Payment of £2,500 followed by up to 18 monthly payments of £100, or at the higher rate £3,500 followed by up to 18 monthly payments of £350. Not everyone will qualify.(3)

That can help. But set it against years of mortgage payments, childcare costs and everyday living.

Life insurance can pay a lump sum or, with some policies, a regular income to your loved ones if you die during the period covered, subject to the policy terms. It’s not about putting a price on your life. It’s about helping the people you love financially if you’re not there to provide for them.

So, how would you manage?

Put the policies and jargon to one side, and ask yourself three simple questions:

• If I couldn’t work: how long could I manage on sick pay or benefits before my savings started running out?

• If I became seriously ill: could I take the time I needed to recover without putting my finances under pressure?

• If I died: would the people who depend on me have enough to manage without my income?

You might already have great employer benefits, healthy savings or insurance that does the job. If so, that’s a good place to start, and it’ll always be taken into account when you speak to us. The biggest risk isn’t necessarily having no support. It’s assuming you’re covered when you haven’t checked.

The Waddle takeaway

We’re not here to tell you the government won’t help. It can, and that support really does matter.

But state benefits come with eligibility rules and limits, employer sick pay varies, and what’s available after a serious illness or bereavement may not stretch as far as your family needs. Protection isn’t about expecting the worst. It’s about understanding your options and working out what makes sense for you.

So rather than asking “Will the government look after me?”, ask: “If life took an unexpected turn, would I have the protection I need?”

If you’re not sure, we’re happy to talk it through.

(1) GOV.UK, benefit and pension rates 2026 to 2027.
(2) as above.
(3) as above.