The Financial Conduct Authority (FCA) has published its landmark study into how retail customers perceive and engage with the protection market.
The survey of 14,326 UK consumers between September and October 2025 found 42% held pure protection policies with the majority (58%) having no cover at all.
It was conducted as part of the regulator’s investigation into the distribution of pure protection products.
Of the overall response group, most life insurance policyholders arranged the plans themselves (26%) compared to 4% through an employer.
For critical illness the personal arragement was 13% compared to 4% through employers, while for income protection it was more evenly split with 9% privately arranged compared to 5% through employers.
It also explored how satisfied consumers were with their protection purchases and how many policyholders had pre-existing conditions or vulnerabilities.
Demographics
Pure protection policyholders were more likely to be male (53% compared to 47% women), working (76% plus 14% who were retired), under 65 years and with dependent children.
The percentage of people in each age group who had policies was 29% among 18-34 years old, 30% among 35-49 year olds, 25% among 50-64 year-olds, 9% among 65-74 year-olds and 6% for those aged 75 and over.
Pure protection policyholders are also likely to have higher levels of household income, savings and are more likely to hold a mortgage.
Over half (58%) of those surveyed were non-policyholders.
These people were slightly more likely to report low financial capability, resilience, and poor health but no more likely to have experienced a negative life event in the last 12 months, according to the report.
The main reasons they gave for having no cover was that it was too expensive (19%), they had other financial priorities (18%), they did not think they needed it (17%), they had not got round to it (10%) and they did not know where to start (9%).
The FCA research aimed to find out from consumers:
- their understanding of pure protection products and the main policy features
- their levels of engagement during and after the sales process
- the extent to which they shop around for policies
- the factors that influence consumers’ purchasing decisions
- what drives them to reassess their coverage, switch or lapse
- their (or their families’) experience and perceptions of the claims process
The nationally representative survey included 8,222 consumers who had no protection in place, 6,104 holders of pure protection products, 4,876 holders of private pure protection products and 640 people who had taken out a pure protection product in the last 12 months.
