If you are employed and you cannot work, something catches you. Statutory Sick Pay at the very least, and employer sick pay on top if your contract is generous.
If you are self-employed, nothing catches you. That is not a gap in your cover. It is the absence of any cover at all, from day one.
You are not entitled to Statutory Sick Pay
SSP is for people classed as employed for tax purposes. If you pay your own tax through self assessment, you are not eligible. Sole traders and partners get nothing.
Two changes came in on 6 April 2026 that made SSP more generous. It is now paid from the first day of absence rather than the fourth, and the minimum earnings threshold has been removed, so lower earners who previously fell outside it now qualify. Both are real improvements. Neither of them applies to you if you are self-employed.
For those who do get it, SSP is the lower of £123.25 a week or 80% of average weekly earnings, for up to 28 weeks (2026/27 rates). Even at its best that is a fraction of most working incomes.
Company directors are a special case
If you run a limited company and pay yourself a salary through PAYE, you are an employee of your own company and may qualify for SSP on that salary. Since April 2026 a small salary no longer rules you out, because the earnings threshold has gone.
The catch is arithmetic. Most directors take a small salary and the rest as dividends, and SSP is calculated on the salary alone. So the payment is small. It is also paid by your own company, which is not generating income while you are the one who is ill.
So ask the question properly
Not "am I covered", but: if you could not work from tomorrow, how long could your household run on savings alone?
Most people answer in weeks. A serious illness or injury is measured in months. And for many self-employed people the business costs carry on while the income stops, so the savings drain faster than they expect.
What income protection actually does
It pays a monthly benefit if illness or injury stops you working and your claim meets the policy terms. It is not a lump sum. It is a replacement income, paid monthly, until you recover, until the benefit period ends, or until the policy term finishes.
The benefit amount, the payment period, the deferred period, the occupational definition, the exclusions and the premium all vary between insurers and policies. There is no single product here, which is exactly why the detail matters.
The deferred period is the decision that matters most
The deferred period is how long you wait after stopping work before the benefit starts paying. Options typically run from a few weeks to a year.
An employee matches it to their employer sick pay. You have no employer sick pay, so you match it to your savings. A longer deferred period costs less; a shorter one costs more and pays sooner.
The right answer is the point at which your savings genuinely run out, not the point at which you would like the money to arrive. Getting this wrong in either direction is expensive, and it is the single easiest thing to get wrong on your own.
How insurers work out your benefit
They base it on your evidenced earnings. For sole traders that usually means net profit. For directors it usually means salary plus dividends, and some insurers will consider profit retained in the company.
Maximum benefit levels are set by the insurer and vary between them. Insurers deliberately cap the benefit below your normal income, so income protection replaces part of what you earn rather than all of it.
Occupational definitions
- Own occupation. Pays if you cannot do your own job. The strongest definition.
- Suited occupation. Pays if you cannot do your own job or another suited to your experience and training.
- Any occupation. Pays only if you cannot do any work at all. The weakest, and the one most likely to disappoint at claim.
Which definitions are available to you depends on the insurer, your occupation and your circumstances.
The honest position
Income protection is the cover self-employed people need most and buy least. It is not right for everybody. If you hold substantial savings, have nobody depending on you and carry low fixed costs, the case is weaker and we will tell you so.
For most self-employed people with a mortgage and a household, it is the first policy to look at, ahead of the ones that get talked about more.
If you are also looking at a mortgage, it is worth reading how lenders assess self-employed income, because the same figures drive both conversations.