UK employee demand for income protection triples between ages 20 and 59, but only 24% of employers offer it, Gallagher finds

New analysis from Gallagher, the global insurance and risk management consultancy, shows that as UK employees age, their benefit selections shift from lifestyle-focused offerings to protection and health-focused benefits later in their careers.

The data points to a gap between what employees want from their benefits packages and what employers currently provide. Demand for Income Protection rises from 4% among employees aged 20–29 to 12% among those aged 50–59. However, less than a quarter (24%) of employers offer Income Protection to their workforce.

The analysis is based on benefit selections made by approximately 65,000 UK employees at 25 companies using Gallagher Guide, an all-in-one employee benefits platform.

Hidden demand for under-offered protection benefits

Gallagher’s findings highlight a mismatch between employee preferences and employer provision. Employee personal accident insurance appears among the top ten selected benefits across all age groups, yet it is offered by just 12% of employers working with Gallagher.

From lifestyle perks to protection for older employees

Benefit preferences change significantly over the course of a career. In their 20s, employees tend to select lifestyle-led benefits, with travel insurance ranking among the top choices.

From age 30 onwards, priorities shift in line with evolving life stages and financial responsibilities. By their 40s, protection benefits become more prominent: employee critical illness accounts for more than 22% of selections and overtakes traditional lifestyle perks.

In later career stages, the focus on financial security intensifies. Income protection rises to 12% of selections among employees aged 50–59. Employee critical illness insurance shows a similar pattern, selected by 9% of employees aged 20–29, compared with 15.6% among those aged 50–59.

Top three most popular benefits by age group

• 20–29: Holiday Trading (18.88%); Dental Insurance (12.97%); Travel Insurance (9.07%)
• 30–39: Holiday Trading (19.32%); Employee Critical Illness (19.30%); Dental Insurance (18.33%)
• 40–49: Holiday Trading (22.39%); Employee Critical Illness (22.32%); Private Medical Insurance (18.82%)
• 50–59: Holiday Trading (23.94%); Private Medical Insurance (19.52%); Dental Insurance (18.58%)

Time flexibility is the one benefit every generation agrees on

Holiday trading is the most popular flexible benefit across every age group, reflecting ongoing interest in flexible working arrangements. Uptake increases with age, rising from 19% among employees aged 20–29 to 24% among those aged 50–59, suggesting flexibility becomes more valuable as personal and professional responsibilities grow.

While holiday trading is available through 72% of Gallagher clients, Gallagher says employers may be able to improve engagement by expanding access to this highly sought perk.

Impact and expert view

Alistair Dornan, Managing Director of UK Benefits in Gallagher’s Benefits & HR Consulting Division, said:

"As people move through their lives and careers, it's natural that their priorities change. Early career employees often place greater value on lifestyle led benefits such as holiday trading or gym membership. As responsibilities grow, protection benefits—particularly income protection and critical illness cover—become increasingly important.

"Employers shouldn't rely on long held assumptions about what their workforce wants. Our data shows clear, evolving patterns in employee behavior, and organizations that use these insights can design benefits that genuinely align to life stages and real employee needs. My message to employers is simple: let the data guide your decisions. Use insight to modernize your benefits strategy, close the gap between what you offer and what your people value, and strengthen financial resilience and long-term retention across your organization."