Younger Workers Least Likely to Protect Income

Why It Matters

The lack of income protection awareness leaves a large portion of the workforce vulnerable to financial hardship during illness or injury, especially among younger, lower‑paid employees.

Key Takeaways

• 69% of 18‑24‑year‑olds unaware of income protection coverage.
• 61% without cover lack full understanding of policy benefits.
• Women less likely than men to have coverage (54% vs 45%).
• 70% earning under £25k lack coverage, citing insufficient income.
• 52% don’t know where to obtain income protection insurance.

Pulse Analysis

Income protection insurance, often overlooked, serves as a financial safety net when illness or injury interrupts earnings. While the broader market recognizes its value, the Shepherds Friendly poll reveals a stark generational divide: nearly seven in ten workers aged 18‑24 lack basic awareness of what a policy can cover, including mental‑health-related absences. This knowledge gap is compounded by low visibility of providers, leaving a sizable cohort unprotected despite the growing prevalence of long‑term health challenges in the modern workforce.

Employers face a dual challenge of educating staff and integrating protection into total rewards strategies. Gender disparities surface, with women 9% less likely than men to hold coverage, reflecting broader trends in financial literacy and risk perception. Moreover, 70% of employees earning under £25,000 cite insufficient income as a barrier, suggesting that affordability and perceived relevance are critical hurdles. Companies that proactively communicate the mental‑health component of income protection can enhance employee well‑being, reduce turnover risk, and align with ESG objectives.

For insurers, the data signals untapped market potential. Digital platforms that simplify policy discovery, offer tiered pricing, and clearly articulate mental‑health benefits can attract younger, price‑sensitive segments. Tailored education campaigns—leveraging social media, employer partnerships, and fintech integrations—can bridge the awareness divide. As the gig economy expands and traditional employment structures evolve, robust income protection will become a cornerstone of financial resilience, driving both consumer demand and industry innovation.