No sick pay? Here's what happens if you can't work

If you're self-employed and you can't work because you're ill or injured, there's no employer quietly topping up your pay while you recover — because there's no employer. Whatever income you'd normally bring in stops the day you stop working, unless you've put something in place beforehand. Statutory Sick Pay, the safety net most employees get, doesn't apply to the self-employed at all, and the state benefits you might be able to claim instead are generally modest and slow to arrange.

That's the entire case for income protection insurance: a policy designed to replace part of your income if you're unable to work because of illness or injury, paying out regularly for as long as you're off, up to whatever limit you chose when you took the policy out.

Why Statutory Sick Pay doesn't help you

Statutory Sick Pay (SSP) is a legal minimum amount employers must pay eligible employees who are off work sick, for a set period. As a self-employed person, you don't have an employer, so you're not eligible for SSP under any circumstances. If you can't work, the usual route to state support is Employment and Support Allowance or Universal Credit, both of which involve an assessment process and pay considerably less than most self-employed people would need to cover their outgoings.

What income protection actually does

Income protection insurance pays you a regular income, typically a proportion of your normal earnings, if you're unable to work because of illness or injury. It isn't a single lump sum — that's a different job, done by critical illness cover, which pays a one-off amount on diagnosis of a listed serious illness rather than an ongoing income. Income protection is designed to replace lost income for as long as you're off, up to whatever limit applies: often until you can return to work, retire, or reach the end of the policy term.

Deferred period: when payments actually start

Every income protection policy has a deferred period, the length of time you have to be off work before payments begin. Common deferred periods run from four weeks to a year. The longer the deferred period you choose, the more of the early weeks you're covering yourself, which tends to bring the premium down. If you've got savings or some other short-term buffer, a longer deferred period might make sense; if you'd struggle without income from week one, a shorter deferred period matters more, even if it costs more to have.

Own-occupation vs any-occupation

This is one of the most important differences between policies, and it's worth understanding before you compare anything else.

• Own-occupation cover pays out if you can't do your own specific job, the work you actually do with the skills you actually have. If you're a plumber who injures a shoulder badly enough that you can't do plumbing, own-occupation cover pays out even if you could theoretically sit behind a desk.
• Any-occupation cover only pays out if you can't do any job you're reasonably suited to by training or experience, not just your own. It's often cheaper, but it sets a much higher bar to meet for a claim.

For most self-employed people, particularly anyone doing physical or specialised work, own-occupation cover gives more meaningful protection, though it isn't automatically the right choice for everyone.

Short-term vs long-term policies

Short-term income protection pays out for a limited period per claim, often one or two years, then stops even if you're still unable to work. Long-term income protection can keep paying right up until you return to work, retire, or the policy ends, whichever comes first, which makes it the closer match to what most people mean by "income protection" if they want ongoing cover rather than a temporary bridge.

How much cover makes sense

Insurers typically limit how much of your income you can insure, since the point is to replace what you'd lose, not improve on it. A sensible starting point is your regular monthly outgoings, mortgage or rent, bills, essentials, rather than your full income, since that's the amount you genuinely can't go without.

What insurers actually ask about

When you apply, insurers look at your occupation, your health, whether you smoke, and sometimes your income, to work out the risk and the terms they can offer. Manual or higher-risk occupations are usually assessed differently to office-based work, and some occupations come with restrictions on own-occupation cover or on the maximum deferred period available. None of this is fixed until you actually apply, so it's worth going through your specific situation rather than assuming a policy will look a certain way before you've asked.

What happens once you're able to work again

Income protection isn't designed to keep paying once you've recovered and returned to work, even part-time. Many policies include provision for a phased return, where payments taper down as your working hours and income build back up, rather than stopping suddenly the day you go back. It's designed to support the transition back to work, not just cover the time you're completely off.

Working out what fits your situation

Every self-employed person's risk looks different depending on the work you do, how physical it is, and what buffer you've already got. I'll talk you through deferred periods, own-occupation cover, and how much makes sense for you specifically. Occupation is one of the biggest factors in what you'd actually be quoted — what affects income protection cost goes through it in more detail. Have a look at income protection or get in touch below and we'll work through it together.