Mental health awareness has improved significantly in the last decade and there is far less stigma around conversations about our wellbeing.
Despite this, we don’t always consider the financial side of the issue and how poor mental health could make it difficult to manage your wealth in the short term, and work towards long-term goals.
If you face mental health challenges that make it difficult to work, for instance, you may experience disruption to your financial plan.
Planning for this eventuality may be more important than ever as mental health problems are on the rise. Fortunately, the right protection can help you navigate the situation.
Read on to learn more.
Anxiety and depression rates have increased by 75% in UK workers in the past decade
New research from insurance provider Vitality examined mental health issues in UK workers in the past decade.
According to Cover Magazine, the findings showed that rates of anxiety and depression have increased by 75% in the last ten years, and 15% of those surveyed had experienced burnout.
This could mean that you’re more likely to face mental health problems and this might affect your ability to earn an income.
In fact, a separate report from Cover Magazine found that mental health issues were the leading cause of employee absence for 48% of employers.
If you’re unable to work for an extended period of time due to poor mental health, you could see your income fall significantly.
Sick pay may not provide a high enough income to meet your financial obligations
Anxiety, depression, and burnout can become debilitating and you may need to take time out of work while you manage your mental health.
Your employer is not legally obliged to match your current salary if you’re out of work due to illness or injury. Instead, they are required to pay Statutory Sick Pay (SSP) to eligible employees.
In 2025/26, SSP is £118.75 a week. While your employer may choose to offer a more generous sick pay package, they don’t necessarily have to. Those that do are unlikely to pay the increased amount indefinitely either.
This could mean you rely on SSP, which may be far less than your normal salary, to manage your living expenses and contribute to savings and investments for the future.
If you’re out of work for an extended period, you could struggle to pay important bills. More importantly, you might fall behind with your retirement saving, meaning you must make sacrifices to your lifestyle when you’re older.
The right protection could prevent this situation.
Income protection offers regular payments if you’re unable to work
If you’re out of work due to mental health issues, an income protection policy could help you maintain financial stability until you’re well enough to go back.
This type of protection offers a regular monthly payment – normally a percentage of your salary – if you can’t work due to illness or injury.
These funds will supplement any sick pay you receive, meaning you can continue meeting your short-term financial obligations and saving for the future. Ultimately, this means that you won’t face disruption to your financial plan.
Protection gives you valuable peace of mind during a difficult time
When you’re already dealing with anxiety, depression, or burnout because of excess stress, you don’t want to add financial worries on top too.
If you’re falling behind on bills or have concerns that you aren’t putting enough in your pension, you’ll likely experience more anxiety, making it difficult to manage your mental health.
Protection provides valuable peace of mind because you can be confident that you are financially stable and can continue working towards your long-term aims, even though you’re out of work.
This means you can focus on your own mental wellbeing and give yourself the time you need to recover and eventually return to work.
Some insurers provide additional benefits including mental health support
When you take out protection, you often receive lots of additional benefits from your insurer. For instance, a life insurance policy may give you access to:
- Private GP appointments
- Nutritionists
- Physiotherapy
- Grief support
- Discounted gym memberships
- Counselling and mental health support.
Using the mental health support available to you could help you manage your stress and anxiety. Taking advantage of other benefits to improve your general health could support your mental wellbeing too.
All this means you could potentially avoid a situation where you need to take time out of work due to mental health issues.
Get in touch
We can help you find the right protection for yourself and your family.
Please get in touch or email us at advice@mlifa.co.uk for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.