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The numbers are stark. Twenty-one million adults in the UK have no life insurance, no critical illness cover, and no income protection — and the Financial Conduct Authority wants that to change fast.
The FCA is now working with a broad coalition of industry groups and government bodies to close what it calls a serious protection gap. The headline figure: 58% of UK adults are currently unprotected, meaning more than half the country is one bad diagnosis or sudden death away from financial collapse. The authority isn’t just flagging the problem. It’s actually moving on it, pulling in partners across the mortgage, pensions, and consumer finance worlds to push insurance conversations into everyday life moments — buying a home, having a child, changing jobs.
Not a small ask.
Who’s Involved and What They’re Doing
The Money and Pensions Service is one of the key partners. So is the Digital Property Market Steering Group, which is focused on weaving protection insurance discussions into the homebuying process — basically the point where people are already thinking hard about financial risk. The Protection Distributors’ Group is planning a consumer campaign aimed specifically at demographics that historically don’t buy insurance. That means younger people, lower earners, and groups who’ve probably never been reached by a traditional broker.
The Association of Mortgage Intermediaries is taking a different angle. It’s working on how advisers actually talk about protection options — the communication side of things, which is probably more important than most people give it credit for. Bad framing kills sales. Confusing language keeps people uninsured. The FCA clearly thinks the adviser conversation needs fixing just as much as the product itself.
All of this flows from the FCA’s Pure Protection Market Study, which laid out in pretty clear terms which groups are most at risk. Renters came up. So did the self-employed — gig economy workers, freelancers, contractors — people who don’t have employer sick pay or death-in-service benefits to fall back on. People with pre-existing medical conditions were flagged too, a group that’s historically struggled to get affordable cover at all.
Innovation Push and the TechSprint
The FCA is also trying to shake loose what it sees as unnecessary friction in the market. It’s hosting a webinar specifically to clarify its own regulations — which is kind of an admission that firms have found the rules confusing or have been using perceived regulatory barriers as a reason not to innovate. The authority wants to make clear that the rules aren’t the obstacle.
And there’s a TechSprint coming. Firms were invited to express interest by November 13. The idea is to get companies in a room — or the digital equivalent — and actually build solutions to the problems the market study identified. It’s an approach the FCA has used before in other sectors, and it can move faster than traditional consultation rounds.
One specific bottleneck the FCA wants to crack: delays in getting medical records. It’s working with the Association of British Insurers on that. Anyone who’s applied for life insurance with a health history knows exactly how slow and frustrating that process gets. The FCA seems to think fixing the back-end paperwork problem could meaningfully improve access, particularly for the groups with pre-existing conditions who need the cover most but face the most friction getting it.
What Firms Are Being Told
The FCA released findings on competition, switching, and claims experiences across the protection market. The verdict on competition: generally effective. But the authority didn’t leave it there. It was pretty direct that it will step in if firms fall short on Consumer Duty obligations or product governance standards.
That’s not a vague threat. Consumer Duty has real teeth now, and the FCA has shown it’s willing to use them. Firms are being told to look at the published findings and honestly assess whether their own practices stack up. Are customers getting fair value? Are claims handled properly? Is switching easy enough? The FCA wants firms asking those questions themselves — before the regulator has to ask them on behalf of a complaint.
No new market-wide rules are coming, at least not right now. The FCA was clear on that. But it’s watching, and it said it’ll act on compliance shortfalls when it finds them.
The broader picture here is a regulator that’s moved past just studying the problem. The Pure Protection Market Study did its job — it named the gaps, named the vulnerable groups, and built the case for action. Now the FCA is in execution mode, using partnerships rather than new rules as its primary tool. Whether that’s enough to actually shift the needle on 21 million unprotected adults is unclear yet. Consumer campaigns don’t always land. Adviser training takes time. TechSprints produce prototypes, not always products.
But the pieces are in motion. The Protection Distributors’ Group campaign is coming. The TechSprint deadline passed November 13.
Frequently Asked Questions
How many UK adults currently lack protection insurance?
According to the FCA, 21 million adults in the UK have no life insurance, critical illness cover, or income protection — representing 58% of the adult population.
Which groups does the FCA identify as most at risk?
The FCA’s Pure Protection Market Study flagged renters, the self-employed, and people with pre-existing medical conditions as the most underserved and vulnerable groups in the protection insurance market.
Why It Matters
The FCA's initiative to address the significant number of uninsured adults in the UK highlights a critical vulnerability in the financial security of a large segment of the population, particularly among renters and gig workers who often lack access to traditional benefits. This move could reshape the insurance landscape, encouraging greater product innovation and accessibility, while also potentially influencing consumer behavior towards financial planning and risk management. Furthermore, as financial stability becomes increasingly vital in uncertain economic conditions, this effort may drive demand for insurance products, impacting market dynamics and the strategies of financial institutions.
