How Long Could You Pay the Bills If Illness Stopped You Working?
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How long could you pay the bills if illness stopped you working? For 13% of UK business owners, a month at most. New research by Scottish Widows, carried out by YouGov with 2,019 business owners in 2026, found that only around half (52%) could support their household for up to a year after a serious illness or injury.
When you run your own business, your income and the business are closely tied together. If you cannot work, both can suffer at once. Here is what the latest data shows, and how income protection for business owners can fill the gap.
Key facts
- 58% of UK business owners worry about losing income if illness or injury stopped them working (Scottish Widows / YouGov, 2026).
- 13% of UK business owners could support their household for a month or less after a health shock.
- One in 10 UK businesses would stop trading immediately if the owner could not work due to illness.
- 48% of UK business owners have never heard of executive income protection.
- Executive income protection can cover up to 80% of a director's salary and dividends, compared with around 60% for personal income protection.
How long could business owners cope without an income?
Most would feel the pressure quickly. 13% could last a month or less, 38% up to six months, and 52% up to a year. That leaves almost half unsure they could manage even 12 months on savings alone.
| How long could you support your household after a health shock? | Share of owners |
|---|---|
| Up to 1 month | 13% |
| Up to 6 months | 38% |
| Up to 1 year | 52% |
Source: Scottish Widows Business Protection Research, conducted by YouGov, March 2026 (2,019 GB business owners and senior decision makers). Figures are cumulative.
Directors on the payroll may be entitled to Statutory Sick Pay, but it is paid at a flat weekly rate that falls well short of what most directors take home from salary and dividends.
Who worries most about losing their income?
Younger owners and women are the most concerned. 58% of all business owners worry about losing income through illness, rising to 64% of women, 70% of those aged 35 to 54 and 73% of those aged 34 and under.
| Business owners worried about losing income through illness | Share of owners |
|---|---|
| All business owners | 58% |
| Female business owners | 64% |
| Aged 35 to 54 | 70% |
| Aged 34 and under | 73% |
Source: Scottish Widows Business Protection Research, conducted by YouGov, March 2026 (2,019 GB business owners and senior decision makers).
What happens to the business if the owner can't work?
For many small businesses, the owner is the business. One in 10 say they would stop trading straight away if they could not work due to illness. Even where the business carries on, profit often falls just as the owner needs income most.
Why don't more business owners have income protection?
Mostly because they have never heard of the right product. 48% of owners have never heard of executive income protection, and a further 18% have heard of it but do not know what it is. That means two in three owners are unaware of cover designed specifically for them.
How does executive income protection work?
Executive income protection is income protection owned and paid for by your company. If illness or injury stops you working, the policy pays a monthly benefit to the company, which passes it to you through payroll. You can find the full detail in our executive income protection guide.
Executive income protection premiums qualify for corporation tax relief, and there is no benefit-in-kind charge for the director, subject to HMRC's wholly and exclusively rules. The same policy can also insure a non-working shareholder spouse.
| Feature | Executive income protection | Personal income protection |
|---|---|---|
| Who owns and pays | Your company | You, from taxed income |
| Income covered | Salary and dividends, plus potential bonuses | Varies by insurer |
| Maximum benefit | Up to 80% of salary and dividends | Typically around 60% of income |
| Non-working shareholder spouse | Can be covered on the same policy | Needs a separate policy |
| Who receives the benefit | Your company, paid to you via payroll | You, directly |
What could that look like in practice?
Take a director who draws £20,000 salary and £60,000 dividends, a total of £80,000 a year. The table shows the maximum cover under each type of policy.
| Illustrative example: £80,000 salary and dividends | Annual benefit | Monthly benefit |
|---|---|---|
| Executive income protection (up to 80%) | £64,000 | £5,333 |
| Personal income protection (typically 60%) | £48,000 | £4,000 |
Source: Illustrative figures only. Executive income protection benefit is taxed as income when paid through payroll; personal income protection benefit is usually paid tax-free, so the gross figures are not directly comparable. Limits vary by insurer and occupation.
Income is just one of the gaps the 2026 research uncovered. Our roundup of business protection statistics for 2026 covers key people, debt and share ownership too. A specialist adviser can help you compare the options for your own income, and Executive Life is authorised and regulated by the Financial Conduct Authority. Contact our team today to arrange a quote.
Frequently asked questions
How long could most business owners cope without income?
Not long. 13% of UK business owners say they could support their household for no more than a month after a serious illness or injury, and only 52% could manage for up to a year, according to Scottish Widows research conducted by YouGov in 2026.
What is income protection for business owners?
Income protection for business owners is cover that pays a monthly benefit if illness or injury stops you working. For company directors, executive income protection is owned and paid for by the company and pays the benefit to the company, which passes it to you through payroll.
How much of my income can executive income protection cover?
Executive income protection can cover up to 80% of a director's salary and dividends combined. Personal income protection typically covers around 60% of income, so the company route can protect a larger share of what you take from the business.
Does executive income protection cover dividends?
Yes. Executive income protection covers a director's salary and dividends, and can also include bonuses. This matters because most limited company directors take a large part of their income as dividends.
Are executive income protection premiums tax deductible?
Executive income protection premiums qualify for corporation tax relief, and there is no benefit-in-kind charge for the director, subject to HMRC's wholly and exclusively rules. The benefit is paid to the company and then taxed as income when paid to you through payroll.
Last reviewed: September 2026. Next review: April 2027. Tax rates and thresholds are subject to change.
Written by
Alex Ogden DipFA | Director | Executive Life
Alex Ogden DipFA holds the Level 4 Diploma for Financial Advisers (DipFA) awarded by the London Institute of Banking and Finance (LIBF), the FCA's benchmark qualification for retail investment advisers. He is authorised by the FCA, Ref: AJO01072 (FCA register).
Executive Life is authorised and regulated by the Financial Conduct Authority. This article is for information purposes only and does not constitute financial advice. Tax treatment depends on individual circumstances and may be subject to change. Always seek professional advice before making financial decisions.