Self-employed workers also represent a key growth market. Without access to employer-provided benefits like sick pay, the self-employed are especially vulnerable to income loss. Income protection provides a crucial buffer, allowing them to maintain their financial stability even if they are unable to work for extended periods.
The mortgage market presents another opportunity; mortgage renewals present advisers with a perfect window to revisit protection conversations with clients to discuss how income protection fits into a broader financial plan – one that not only secures their property but also protects their wider income.
Reasons to be optimistic
Despite the financial challenges, there are reasons to be optimistic about the future.
Interest rates are expected to continue falling, with forecasts suggesting they may drop to 4.75 per cent this month and possibly further during 2025. If this trend holds, it could have a positive knock-on effect on mortgage and rental costs, providing much-needed relief to households.
Lower interest rates would also increase the likelihood of more protection conversations taking place between advisers and clients, especially with the increased focus on financial wellbeing under the new consumer duty regulations.
The UK’s protection landscape is changing, and income protection is at the heart of this evolution. As consumers continue to face economic uncertainty, the need for financial security has never been greater.
Income protection is no longer just a supplementary product, it needs to become a cornerstone of financial planning for a wide range of consumers, from renters to self-employed workers to new homeowners or those renewing their mortgages.
This presents us with a fantastic opportunity to cover more people. It will not all be plain sailing, but the future for income protection is definitely optimistic.
Jamie Page is head of protection distribution at The Exeter
