Income protection for the self-employed

7 September 2026

Self employed people get no Statutory Sick Pay at all. There is no employer behind you, which changes which cover you need first.

5 min read · Ben Tomlin · Last reviewed September 2026

The short answer

Self employed people get no Statutory Sick Pay, so there is nothing behind you but savings and the benefits system. Employees can get up to £123.25 a week for up to 28 weeks. That gap is why the deferred period, the own occupation definition and how the insurer defines your income all matter more when you work for yourself.

Why self-employed people have no sick pay safety net

An employee who cannot work usually has something behind them. You do not.

	Employee	Self employed
Statutory Sick Pay	Up to £123.25 a week for up to 28 weeks	None
Employer sick pay scheme	Often, sometimes months at full pay	None
Notice period	Contractual	None
Group income protection	Sometimes provided by the employer	None

So the fall back is savings, then the benefits system.

Employment and Support Allowance pays an assessment rate of up to £95.55 a week if you are 25 or over, and up to £75.65 a week if you are under 25.

Why this matters more than life cover for many people.

If you die, the business stops and the debts are usually dealt with. If you are ill for a year, the mortgage, the bills and the business costs all keep running while nothing comes in.

Self employed with no cover behind you?

There is no charge for a conversation.

Message us

How to prove self-employed income

This is where self employed applications differ most, and where people get caught out.

Insurers will define what counts as your income, and the definition may not match what you think you earn.

Sole traders. Usually net profit before tax, evidenced by accounts or tax calculations.
Company directors. Usually salary plus dividends, and sometimes your share of retained profit. Not every insurer includes the last one.
Newly self employed. Some insurers need a full trading year, others will work from a shorter record or from your previous employed earnings.
Fluctuating income. Often averaged over two or three years, which can work for or against you.

Ask at the outset how the insurer defines income, and how it will be evidenced at claim.

A policy sold on a figure you cannot evidence later is worth less than the paperwork says.

The dividend point matters for directors. If most of your income is dividends and the insurer only counts salary, the cover can be a fraction of what you need.

Setting up a policy with no sick pay

The deferred period is the waiting time before the policy starts paying, and it is the biggest lever on cost.

An employee with six months of sick pay can take a six month deferred period and pay far less.

You have no sick pay, so your deferred period should be set by how long your savings genuinely last.

Deferred period. Common options run from one week to twelve months. Shorter costs more, but for the self employed it is often the right call.
Benefit period. Full term cover pays until you recover or reach the policy end. Short term cover pays for one or two years and costs much less.
Own occupation. The strongest definition. It pays if you cannot do your own job, rather than any job you could reasonably do.
Indexation. Whether the benefit rises with inflation while in payment, which matters on a long claim.
Guaranteed premiums. Fixed for the term, rather than reviewable and liable to rise.

Own occupation is worth insisting on. A weaker definition can leave you technically fit for some other job and receiving nothing.

If budget is tight, a longer deferred period or a shorter benefit period costs less than dropping own occupation.

Nearly all individual income protection is sold with advice, which reflects how much these choices change the outcome.

Cover for your business

Income protection covers you. It does not cover the business.

If you run a limited company, other arrangements sit alongside it and are often more tax efficient.

Relevant life cover. Life cover for a director, usually paid for by the company and generally treated as an allowable business expense.
Executive income protection. The company owns the policy and pays the premium, and benefit is paid to the company to fund your sick pay.
Key person cover. Protects the business against the loss of someone it depends on.
Shareholder protection. Lets the surviving owners buy a deceased owner's shares rather than inheriting their family as a partner.

These have accounting and tax consequences, so involve your accountant before anything is set up.

The most common mistake is a director paying personally for cover the company could have paid for.

The second most common is having no shareholder agreement behind the policy, which leaves the arrangement unable to do its job.

Check broadband before you make an offer

Broadband speeds can vary street by street, so check the exact address before you commit. Ofcom's free checker shows which broadband speeds and mobile coverage are available at any UK property.

Check broadband at an address (Ofcom)

Want all your bills in one?

We can introduce you to a specialist who can combine your mobile, broadband and utilities into one bill. There's no fee for the introduction.

WhatsApp us Contact us

We don't provide these services ourselves. Switching household bills is not a regulated financial service, so FCA protections and the Financial Ombudsman do not apply. We'll only pass your details to the specialist if you ask us to. See our privacy notice.

Frequently asked questions

Do self employed people get Statutory Sick Pay?

No. Statutory Sick Pay is paid by an employer, so self employed people receive none. The fall back is savings and then the benefits system.

How much is Employment and Support Allowance?

The assessment rate is up to £95.55 a week if you are 25 or over. It is up to £75.65 a week if you are under 25. That normally runs for the first 13 weeks while your claim is assessed.

How do insurers work out my income if I am self employed?

Usually net profit before tax for sole traders, and salary plus dividends for company directors. Some insurers include a share of retained profit. Ask how income is defined and evidenced before you apply.

What deferred period should a self employed person choose?

One that matches how long your savings would genuinely last, since there is no sick pay behind you. Shorter deferred periods cost more but start paying sooner.

What is own occupation cover?

It pays if illness or injury stops you doing your own job. Weaker definitions only pay if you cannot do any job you are suited to, which is much harder to claim on.

Can my company pay for my cover?

For some arrangements, yes. Relevant life cover and executive income protection are usually company paid and can be more tax efficient than paying personally. Speak to your accountant about the treatment.