Safeguarding renters - The essential benefits of Income Protection

It’s not only those with mortgages who are vulnerable to illness or injury, tenants are a prime target market for income protection.   

Just like the house buying market, the UK private rental market remains volatile.   Consumers budgets are stretched and rent has been one of the many costs of day-to-day life that have increased for many people. With the rising cost of living and interest rates preventing millions from being able to afford their own mortgages, the trajectory of the rental market could play a pivotal role in the lives of many people across the UK for years to come. 

The latest UK rental statistics from the Office for National Statistics (ONS) show that almost a fifth (19%) of UK homes are privately rented, as of 2025¹.    

As the cost of buying a house remains unattainable for many, the demand for rental properties has understandably increased.  With landlords feeling the pinch of increasing costs of running a property, rental payments have continued to increase.  In the 12 months to March 2025, the average UK private rent increased by a further 7.7% to £1,332 with the cost of rent in England being £1,386. Just paying the rent, for many, is therefore quite a challenge as it consumes an ever-greater proportion of income, 34% an average in England and between 39% and 57% in London.²

Renters are becoming increasingly vulnerable

Inevitably this impacts the ability for renters to establish savings which would support them if they were unable to work due to illness or injury. 

Average savings levels of £2,481 for those aged 18-24 and of £3,544 for those aged 25-34³ are unlikely to last long if they lose their income.  It is unsurprising to find, then, that more than half (57%) of renters would not be able to afford an unexpected, but necessary, expense of £850.⁴  Being unable to meet an emergency payment demand can be seen as a proxy for financial vulnerability. 

Looking to the future, as house prices continue to rise, renters are required to save more towards a deposit.  Income protection can be purchased for a small percentage of what they are saving towards their deposit each month, effectively protecting their savings and their future plans.   

Helping renters see the benefit of Income Protection

Advisers can support renters with understanding the limitations of Statutory Sick Pay and the importance of having a back-up plan should renters be unable to work on health grounds.  

This will allow you to help your clients understand the differences between Life Assurance, Critical Illness Cover and Income Protection as they are easily confused.  

The inability of critical illness cover to pay out for stress-related problems, bad backs and other non-life threatening conditions should, in particular, leave renters in little doubt that income protection offers them greater security.   

The flexibility of Income Protection to adapt to changing circumstances can be a key talking point in showing clients why Income Protection may be the right solution for them.  Also, by protecting their income, it can also help safeguard any deposits your renting clients may have been saving towards a first home. 

Advisers can also highlight the product’s ability to pay out as soon as the deferred period has elapsed, even if the claim is still being assessed, which gives further peace of mind around payment of claims. 

‘Generation Rent’

Scottish Widows research shows both the renter protection gap and opportunity, with only 4% of renters having income protection currently.  This is despite only 3 in 10 renters stating they the had enough savings to cope with a financial emergency and two thirds (66%) saying they are concerned about loss of income if they were unable to work due to illness or injury.⁵

With renters generally entering into 12-month contracts at a time, statutory sick pay will rarely be enough to cover the costs making this sector enormously vulnerable and therefore a good opportunity.  Shockingly, our research found that 74% of renters had either never heard of income protection or had heard of it but didn’t know what it was.⁵ Just spreading the overall message about the benefits of income protection as widely as possible should certainly help, but there is scope to seek out those channels that renters specifically engage with.   

It’s also possible that this demographic could benefit from a slightly different sales approach. Insurance generally may not feature heavily on their radar. They do not have to secure buildings insurance for their property, may not bother with contents cover, and may well have a more pronounced ‘live for today’ mentality. 

Rather than present income protection as an insurance policy with some useful bells and whistles, it might be more effective to position it as a suite of valuable lifestyle benefits that also includes an insurance mechanism.  

The added-value features that income protection providers now include are so significant that a renter might well be tempted by the idea of paying a monthly premium to secure access to everything from virtual GP services, mental health support and regular physical health MOTs to blood tests and dietary advice from nutritionists.  

The fact that they have £1,000 a month or so of income protection cover thrown in as well to safeguard against something they probably think is never likely to happen to them could well be a secondary consideration.  

Sources:

¹ONS Private rent and house prices, Uk, April 2025 Private rent and house prices, UK - Office for National Statistics

²ONS Private rental affordability, 2023 Private rental affordability, England and Wales - Office for National Statistics

³Raisin, 2025 Average savings by age in the UK (2025) | Raisin

⁴Intergenerational foundation, 2023 Young renters are struggling and increasingly financially vulnerable - Intergenerational Foundation

⁵Scottish Widows & YouGov research, Jan 2025 

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