Group income protection: The powerful tool most UK employers are missing out on

The UK government is planning to overhaul the benefits system to create what the Department for Work and Pensions (DWP) has termed a 'more pro-work welfare system'.^[1] Its goal is to help many of the 2.8 million long term sick people of working age into employment. The Office for Budget Responsibility (OBR) estimates the changes could shave £4.8 billion from the UK's welfare bill.^[2]

The welfare system is complex, and the government recognises that to make changes and improvements, a variety of different strategies will need to come into play. Prevention and early intervention are a key focus which will be brought out in the DWP's Keep Britain Working Review. The review highlights the importance of creating opportunities for people with work limiting health conditions and disabilities. It also underscores the importance of promoting healthy, inclusive workplaces.

Many employers are struggling with this issue: in the UK, the rate of employee absence has reached its highest level in a decade.^[3] Prevention, retention, early intervention and rapid rehabilitation are likely to be the best ways to solve the problems we now face. Employers already play a key role in all these areas. However, it's possible we'll see even more responsibility placed on the employer by the government to look after the health and wellbeing of employees and to create the right conditions for a healthy workplace.

Leveraging group income protection as a strategic solution for health and wellbeing

With 20,643 group policies in the UK^[4] many employers already recognise this type of protection helps people to avoid financial stress if they become unwell. Not only that, but they are also recognising that by working with insurers they can minimise claims by keeping workers well in the first place. Services like virtual GPs, employee assistance programmes, physical and mental wellbeing support such as personal training and mindfulness therapy and counselling are being provided, with the security of the group income protection payment, as a financial back-up plan. Private healthcare services can also help to fill the gap for employees who are struggling to access support through public healthcare systems, as identified in our Global Medical Trends Survey which explores this.

Using the insurer's early intervention models, when an employee is struggling at work or has gone off sick, the employer can engage vocational rehabilitation consultants from the insurer to help develop a tailored support plan for the individual that will support the employee and the employer to limit extended absence. These group income protection policies, and the services they can provide, have a proven track record of helping employees either stay at work or get back to work quickly, helping employers to make the reasonable adjustments that they need. Group risk insurance has proven invaluable to employee health and wellbeing, with over 20,000 interactions in 2024^[5] providing essential support for mental health, musculoskeletal issues and cancer care. This aligns with the Keep Britain Working Review's focus on early intervention and rapid rehabilitation.

These insurance policies aren't just for the largest employers. In fact, the majority are taken out by small to medium-sized companies.^[6] However, with just under ten percent of the UK working population covered, we believe if more were protected through group income protection, the UK would start to tackle the issues faced with long term work absence.

How are leading employers tackling long term sickness?

It doesn't just end with Group Risk Policies; highly effective employers are also implementing comprehensive strategies and inclusive workplace policies to enhance employee health and wellbeing, addressing both short-term and long-term sickness through a focus on psychological safety, prioritising wellbeing, empowering line managers and early detection.

• Make the workplace a safe place for employees to be themselves: Highly effective employers recognise that people should feel able to bring their whole selves to work. People with long-term conditions know they can access support when they need it and will be met with understanding by their colleagues and managers. Employers who are doing this also communicate their wellbeing initiatives to their organisations and realise that wellbeing and diversity, equity and inclusion are closely connected.
• Integrate wellbeing as a business priority: Because they appreciate that wellbeing is business critical, highly effective organisations integrate it into their key business processes and priorities. They are ring-fencing resources for wellbeing, so that support remains consistent whatever is happening in the business and wider economy.
• Prioritise supporting line managers: Line managers are often the first port of call for somebody who's struggling with their physical or mental health. They should be trained in having sensitive conversations and be able to confidently steer employees toward the support they need. Some Group Income Protection insurers provide line manager training in key conditions that affect absence – to ensure line managers feel confident and competent. When an issue is picked up which requires early intervention, they should know what resources and support tools are in place to help them.
• Early detection is a key piece of the jigsaw: Employers which offer health screening, for example, cancer checks give their people the power of information. They are more likely to pick up on issues early — putting them in the best possible position to recover and potentially reducing the length of their absence.
• Avoid doubling up: It's easy for companies to accidentally double up their benefits support, leading to unnecessary costs, overlap and confusion.
• Evaluate what works and what doesn't: In some organisations, a mismatch exists between the benefits on offer and what matters most to employees. WTW's Wellbeing research shows,^[7] for example, that some employers are prioritising emotional and physical wellbeing while their employees are looking for more support in financial wellbeing. Highly effective employers see the importance of regularly evaluating their wellbeing support, cutting out what doesn't work and ring-fencing what does. They have rigorous evaluation in place to help them. The support landscape is constantly evolving; they are continually looking at what new support might resonate with their people.

Optimizing your wellbeing strategy

Employers are continually moving through a maze of business strategies, managing their people in uncertain economic times, responding to regulation and planning for the future. Adding a wellbeing strategy (as well as the continuous evaluation that this entails) into the mix can feel overwhelming.

Now more than ever, it's crucial to understand how your strategy measures up and so breaking it down into simple steps can be invaluable. We have deep expertise and knowledge in supporting organisations to do this. From developing a wellbeing strategy, carrying out a Wellbeing Audit to help guide future direction or exploring complete employee benefits package in one place, such as Optimal Benefits.

Wellbeing in the workplace is fundamental to a happy and productive workforce. However, many overwhelmed UK employers are (understandably) struggling to keep up to date with wellbeing tools which could help their people and boost productivity. If you're in this situation, it may be worth seeking support.

If you'd like to discuss the questions it raises further or explore how we can help you, please get in touch by completing the form.

Footnotes

1. "Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper," Department for Work & Pensions, March 2025. Return to article undo
2. "Economic and fiscal outlook," Office for Budget Responsibility, March 2025. Return to article undo
3. "Absence trends in the United Kingdom: Strategies for effective management," WTW, February 2024. Return to article undo
4. "Group Watch Survey," Swiss Re, 2025. Return to article undo
5. "Claims Survey," GRiD (Group Risk Development), 2025. Return to article undo
6. "Group Watch Survey," Swiss Re, 2025. Return to article undo
7. "Employers build momentum on employee wellbeing – but there's still a way to go," WTW, September 2024. Return to article undo

Contacts

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Mark Simmonds

email Email phone +44 7970 826613

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Beth Husted

Associate Director, Health & Benefits (GB)

email Email

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