FCA launches plan to shrink UK protection gap and boost insurance uptake

A new FCA initiative seeks to narrow the UK’s “protection gap”, where 58% of adults lack life insurance, critical-illness cover or income protection, and 59% of that group have never thought about such policies. The regulator’s research, conducted in late 2025 with over 14,300 participants, warns that this gap leaves households vulnerable to financial hardship after illness, injury or death. The plan will prioritize renters, self-employed and gig-economy workers, low-income households and people with existing medical conditions.

Collaboration with the Money and Pensions Service, the Digital Property Market Steering Group and other partners will embed protection discussions at key life events such as home purchase or parenthood. The Protection Distributors’ Group will run a targeted consumer awareness campaign, and the Association of Mortgage Intermediaries will help advisers improve protection conversations. Graeme Reynolds highlighted the aim to expand coverage beyond current customers, while Ewen Tweedie noted opportunities for insurers to promote protection more effectively. The FCA expects initial actions by the end of 2026 and will report progress by the end of 2027.