Income Replacement Calculator
Our income replacement calculator shows how much insurance cover you need to replace your take-home pay if you are unable to work for an extended period. It accounts for existing employer sick pay, Statutory Sick Pay, and savings — identifying the precise monthly shortfall that insurance needs to cover.
Income Replacement Insurance Calculator
Calculate how much income replacement cover you need and estimate your monthly premium. Covers long-term illness, accident, and redundancy.
Why Income Replacement Planning Matters
One in four working-age adults will be unable to work for three months or more during their career due to illness or injury. Statutory Sick Pay of £123.25 per week provides only £534 per month. For someone earning £48,000 per year (£3,095 net per month) with a mortgage of £1,200, the monthly financial exposure after SSP is approximately £2,560. Without savings or insurance, this gap sustained over months or years is financially catastrophic. Use our Income Protection Calculator to model the monthly insurance premium to cover this shortfall, and our Benefits Calculator to estimate any state benefit entitlement during a period off work.
Frequently Asked Questions
The gold standard is a policy that pays until retirement age (66 or 67) if you never return to work. Shorter benefit periods (1 or 2 years) are cheaper but leave you exposed if illness is prolonged.
Own-occupation pays if you cannot do YOUR specific job. Any-occupation pays only if you cannot do ANY job. Own-occupation is significantly more valuable and should be chosen where possible.
Universal Credit for those unable to work provides approximately £3,686 per year — far below most working incomes. It cannot replace a private income protection policy for most workers.
Yes — they serve different purposes. IP replaces ongoing monthly income; CI provides a one-off capital lump sum on diagnosis. Many protection advisers recommend holding both.
Most income protection policies do not pay during pregnancy-related absence unless a separate medical complication arises. Use our Maternity Pay Calculator to model statutory maternity entitlement.
Enter your monthly household essential outgoings and your current monthly take-home pay. The gap between your income and essential expenses is your financial buffer — the calculator shows how long your buffer and any existing savings would sustain you if your income stopped. This helps size the monthly benefit needed from an income protection policy: the benefit should be enough to cover essential outgoings, not necessarily your full take-home, because some discretionary spending can be reduced in a crisis. Income protection benefit is paid tax-free when premiums are paid personally, which means a benefit of 60% of gross salary often approximately replaces your normal net pay. If your employer provides sick pay beyond statutory SSP, factor this into the deferred period selection to avoid paying for overlap.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.