In 2025, the protection market reflects a complex mix of economic caution, regulatory scrutiny and shifting consumer needs.
As mortgage advisers navigate these dynamics, it is clear that protection advice is transitioning from being a ‘nice to have’ to constituting a cornerstone of financial resilience, essential for meeting Consumer Duty requirements.
Let’s take a look at some of the most pressing talking points.
The UK economy has grown modestly so far in 2025 and many households remain financially stretched. The Financial Conduct Authority’s Financial Lives Survey 2024 reveals that:
- 24% of adults have low financial resilience;
- 1 in 10 has no savings, and 21% have less than £1,000 set aside; and
- a fifth of people cancelled or declined to take out insurance in the previous year due to affordability concerns.
Protection is often one of the first outgoings to be cut in difficult times, yet it’s needed most during those same periods. Mortgage advisers must continue to position protection as an essential component of homeownership, not an optional extra.
Property purchase and remortgage opportunities
The mortgage market has seen changes to flexibility in stress testing, and even a return of 100% mortgages for selected clients. While this helps more first-time buyers, it also introduces greater financial fragility.
Clients entering homeownership with minimal savings are particularly vulnerable to income shocks, yet many still overlook protection. Advisers have a crucial role in ensuring these risks are identified and mitigated early in the process.
As fixed-rate deals end, revisit clients’ protection needs
And, with around 1.6 million fixed-rate mortgages due to end in 2025, advisers have a golden opportunity to revisit the protection needs of clients. How has their situation changed since their last review? Have their job status, family size or liabilities changed? A review of current protection products is essential.
Regulatory spotlight
Nearly two years after the introduction of the Consumer Duty, higher and clearer standards of consumer protection are demanded, with a sharper-than-ever regulatory focus.
Many clients are more open to conversations about estate planning and protection
It has been a game changer in getting the industry to take stock of how it delivers good outcomes for clients across all aspects of advice; a long-awaited shift in protection, which often doesn’t get the attention it deserves until it’s too late.
The FCA’s spotlight on protection is also seen through its ongoing Pure Protection Market Study. The regulator says it will report back on its findings with next steps by the end of 2025.
New drivers shift demand
Beyond mortgages, wealth and tax changes are shifting the role of protection insurance in estate planning. Two key developments are:
- The government consultation exploring whether pensions should form part of the taxable estate for inheritance tax (IHT).
- Proposed reforms to agricultural relief and business relief that could restrict or remove IHT exemptions relied on by business owners and landowners.
In response, we’ve seen an increase in adviser demand for protection solutions such as whole-of-life insurance and joint life, second death; and the inclusion of trusts is increasingly being used by wealth advisers to cover expected IHT liabilities.
Protection is often one of the first outgoings to be cut in difficult times, yet it’s needed most
This trend is filtering into the mortgage and mainstream advice space. Many clients are more open to conversations about estate planning and protection. Advisers who understand these links can provide greater value and maintain longer relationships.
To stay relevant and compliant:
- Embed protection at the start. Introduce income
protection, life and critical-illness cover alongside mortgage discussions, not afterwards. - Frame protection as essential. Reposition it as a tool
to maintain homeownership and protect family wealth. - Stay up to date with regulatory direction.
- Explore intergenerational planning.
- Focus on your Consumer Duty responsibilities. Document protection conversations thoroughly, demonstrating fair value and good client understanding.
It’s an exciting time to be part of the protection industry, with more advisers understanding the need to make a significant impact on client security and peace of mind.
Gregor Sked is senior protection development and technical manager at Royal London
This article featured in the June 2025 edition of Mortgage Strategy.
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