What if my sick pay ran out?
Do I Need Income Protection If I Get Sick Pay From Work?
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This guide provides general information only. It is not financial advice or a personal recommendation and does not take account of your individual circumstances.
Quick answer
Sick pay and income protection do different jobs. Employer sick pay is often generous for a limited time, then drops to Statutory Sick Pay or stops. Income protection can start when sick pay reduces or ends and keep paying for much longer. Whether it matters for you depends on how long your sick pay lasts, how much it pays and what savings or other support you have.
Key figures
- SSP is paid from the first day off sick since April 2026
- Day 1
- weekly SSP rate in 2026/27, or 80% of earnings if lower
- £123.25
- maximum SSP period
- 28 weeks
- SSP is taxed like salary
- Taxable
The short version
Most employees get some sick pay, but it is almost always time-limited. The real question isn't "do I get sick pay?" but "what happens to my income if I'm off for longer than my sick pay lasts?"
Income protection is designed for that longer gap. It usually starts after a waiting period you choose, called the deferred period, and can continue until you return to work or the policy ends.
How employer sick pay works
There are two layers.
- Statutory Sick Pay (SSP) is the legal minimum that employers must pay eligible employees.
- Company (contractual) sick pay is anything your employer pays on top. It is set out in your contract or staff handbook and varies a lot between employers.
A common pattern is a period on full pay, sometimes followed by a period on half pay, and then SSP only. The length often increases with length of service. Some employers pay SSP only.
Statutory Sick Pay in 2026
Since 6 April 2026:
- SSP is paid from the first day of sickness absence. The old three unpaid "waiting days" have gone.
- There is no minimum earnings level to qualify, so part-time and lower-paid employees are included.
- It is paid at the lower of 80% of your average weekly earnings or £123.25 a week (the 2026/27 rate).
- It can be paid for up to 28 weeks.
- It is taxable, like salary.
For most people on a typical salary, SSP is a small fraction of their normal income.
What happens when sick pay ends
When company sick pay and SSP have run out, the options usually narrow to:
- Savings and any other household income.
- State support, such as New Style Employment and Support Allowance or Universal Credit, depending on your circumstances. These are usually much lower than a working income, and Universal Credit is means-tested.
- Group income protection, if your employer provides it.
- Personal income protection, if you have a policy.
Where income protection fits
With a personal policy, the deferred period decides where it starts. People often think about the deferred period alongside their sick pay:
- If an employer pays full salary for 26 weeks, a 26-week deferred period would start payments around the time full pay stops.
- If an employer pays SSP only, the drop in income comes almost immediately, so a shorter deferred period, or savings to cover the gap, becomes more relevant.
A longer deferred period generally means a lower premium, because you cover more of the early absence yourself.
Group income protection is different
Some employers provide group income protection as a workplace benefit. It is worth knowing how it differs from a personal policy:
- It is tied to your job. It usually stops when you leave that employer.
- It is often limited in length, for example paying for a few years rather than until retirement.
- Payments are usually taxed, because they are normally paid through payroll.
- The employer chooses the terms, including the deferred period and how much is covered.
What to find out from your employer
Your contract, staff handbook, benefits portal or HR team can usually answer these:
- How long is full sick pay, and does it change with length of service?
- Is there a period of reduced pay before SSP?
- Is there group income protection? If so, what does it pay, when does it start and when does it stop?
- Does anything continue if you leave?
A hypothetical example
Two colleagues each earn £40,000 and each become unable to work for nine months.
- Alex works for an employer that pays six months' full pay, then SSP. Alex's income is steady for six months, then falls sharply for the last three.
- Jo works for an employer that pays SSP only. Jo's income falls sharply from the first week.
The same illness creates two very different gaps. That is why sick pay terms are usually the starting point when people think about income protection and the length of a deferred period.
Questions worth considering
- How long could my household manage on SSP alone?
- What would still need paying each month if my income dropped?
- If I changed jobs, would I lose group benefits I currently rely on?
- How many months of essential costs could my savings cover?
Frequently asked questions
Yes. Since 6 April 2026, SSP is payable from the first day of sickness absence for eligible employees. It is paid at the lower of 80% of average weekly earnings or the weekly rate, £123.25 in 2026/27, for up to 28 weeks.
It depends on the policy. Many policies take ongoing sick pay into account, and payments usually only start after the deferred period. The policy terms explain how other income is treated.
Usually not. Group income protection is normally linked to your employment and ends when you leave. Some schemes offer an option to continue cover individually, but terms vary.
No. SSP is paid through employers, so it doesn't apply to self-employed earnings. Depending on circumstances, New Style ESA or Universal Credit may be available.