Older workers could find they’re more exposed to financial shocks because financial protection doesn’t meet their needs. Read on to find out if a protection gap might affect you and how you could close it.
There are several different types of financial protection, which would pay out a lump sum or regular income when certain conditions are met. For many families, financial protection forms part of their safety net and protects them from unexpected expenses or events.
For example, if you’re a worker, an illness or injury might affect your ability to continue your job. There are two main types of financial protection that could be useful in this circumstance.
- Income protection, which would provide you with a regular income, usually a portion of your normal salary, until you’re able to return to work, retire, or the term ends.
- Critical illness cover, which could pay out a lump sum if you were diagnosed with a covered condition.
The payout you may receive could help you manage your day-to-day finances and even keep your long-term financial goals on track following a shock.
To maintain the cover, you’d need to make regular payments, the cost of which will vary based on a variety of factors, from the level of cover you want to your age.
So, why is there a protection gap for older workers?
A maximum age for financial protection could exclude older workers
A June 2025 report in FTAdviser labelled the insurance industry “outdated” because many providers have a maximum age of 69 or 70 for financial protection.
As people are typically working for longer and many families still have large financial commitments later in life, this gap could leave some workers exposed to financial shocks.
Indeed, according to October 2023 research from the Centre for Ageing Better, 11.5% of people were working past their 65th birthday in 2023, double the number who were in 2000.
Further data from the Office for National Statistics published in April 2024 highlights how the average person in the UK is reaching milestones later in life.
For example, the average age for women to have their first child was 29 in 2020, compared to 23 in 1970. Many women will also have children in their 30s or 40s. So, those working later in life may still have families to financially support.
Similarly, the data shows the average age of a first-time buyer was 36 in 2022. Rising house prices also mean some first-time buyers are taking out a mortgage with a longer term. So, some of these homeowners could be making mortgage repayments into their 70s.
Other factors might affect your financial commitments later in life too. For instance, you may be supporting elderly parents. As a result, the financial protection gap could leave you in a vulnerable position should you experience a shock.
How to create a financial safety net if you’re working later in life
Speak to your financial planner about financial protection
If you think you could benefit from the reassurance that financial protection could provide, there might still be some options. Specialist providers may be able to offer the cover you need.
Your financial planner could help you assess if financial protection is an option for you and which provider may be the right fit. They could also help you identify potential gaps in the cover and how to bridge these to give you peace of mind.
Build an emergency fund
An emergency fund could give you cash to fall back on when you need it most. It’s often a good idea to keep three months of essential outgoings in an easily accessible account to cover short-term shocks.
While an emergency fund might not provide enough if you need to take an extended period off work, it could offer short-term relief and mean you don’t need to immediately worry about meeting financial commitments.
Understand how you could use other assets
You may have other assets you could use if you’re unable to work. For example, if you’re working later in life, you may be able to withdraw some money from your pension to cover your expenses. Alternatively, you might have investments or property that could be sold if you experience a financial shock.
Considering how you’d cope should you face a shock as part of your financial plan could help you assess how you might use a range of assets in an emergency and understand how it may affect other goals.
Contact us to talk about your financial safety net
If you’d like to discuss how to create a safety net as part of your financial plan, please get in touch. We’ll work with you to understand your commitments and assess what’s appropriate for your circumstances, including financial protection.
Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
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.
Approver Quilter Financial Services Limited & Quilter Financial Limited. 06/08/2025