Income Protection Calculator United Kingdom

Income protection insurance replaces part of your earnings if illness or injury stops you working. It pays a regular monthly benefit until you recover, retire or the policy ends, rather than a lump sum. This calculator turns your salary and chosen cover level into the monthly and annual benefit and shows the income it would leave uncovered.

How the cover percentage works

Cover is quoted as a percentage of gross salary. You choose the percentage, but most UK insurers cap it at around 60% of gross earnings, and some pay a higher percentage on the first band of salary and less above it. Insurers want the benefit to sit below normal earnings so there is always a reason to return to work, which also keeps claims and premiums down.

A higher percentage costs more each month, and since the benefit is capped anyway, paying for the maximum is not always good value. Many people set cover to match their essential outgoings, such as mortgage or rent, bills and food, rather than their whole salary. Check whether your employer already provides group cover, as that can reduce how much personal cover you need.

Why 60% replaces much of your take-home pay

When you pay the premiums yourself from taxed income, the benefit is normally paid free of Income Tax and National Insurance, while your salary has both deducted. A benefit of 60% of gross therefore replaces a large share of your normal take-home pay. On a £35,000 salary, take-home pay in 2026/27 is about £28,700 a year, and a £21,000 tax-free benefit replaces roughly three quarters of it.

A group or employer-paid scheme is different: the benefit is usually paid through PAYE as taxable income, so a 60% figure is reduced by tax and National Insurance before it reaches you. The calculator does not distinguish between the two, so treat its output as the gross benefit and adjust if your cover comes through your employer.

Reading the uncovered income figure

The calculator shows the income the policy would not replace: your gross salary minus the annual benefit. You would need to cover that gap from an emergency fund, a partner’s earnings, Statutory Sick Pay in the early weeks or lower spending while you recover. Seeing it in pounds helps you decide whether the cover level is enough for your fixed outgoings.

A worked example

You earn £35,000 a year and choose 60% cover. The annual benefit is £21,000, or £1,750 a month, and the uncovered income is £14,000 a year. A colleague on £50,000 with 50% cover would receive £25,000 a year, about £2,083 a month, and have £25,000 uncovered. The higher earner receives more but carries a larger unprotected gap.

Common mistakes to avoid

The most common is assuming the benefit starts the day you stop working. Nothing is paid during the deferred period, often 13 or 26 weeks, so you still need savings or sick pay to cover it. Another is confusing income protection with critical illness cover or payment protection: income protection pays a monthly income while you cannot work, not a lump sum tied to a diagnosis. People also forget to review cover after a pay rise, leaving a growing gap. And setting cover far above your take-home pay wastes premium, because insurers cap what they will pay whatever you asked for.

How to read your result

Compare the monthly benefit with your essential monthly outgoings, not your full spending. If it covers the mortgage, bills and food, the policy is doing its main job. If the gap looks large, the answer is usually to build an emergency fund for the deferred period and the shortfall rather than to try to buy more than the cap allows. Recalculate whenever your salary changes.

Assumptions and limitations

This is a planning estimate. It treats the benefit as a straight percentage of gross salary and does not model tiered cover, increases in the benefit with inflation, or the deferred period. It does not add Statutory Sick Pay or state benefits, or account for tax on employer-paid schemes. The 60% ceiling is common market practice, not a legal limit, so the maximum you can buy depends on the insurer. Check the policy terms and, for a decision this important, consider speaking to a regulated protection adviser.

About This Income Protection Calculator

Use this income protection calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.