Why ownership estimates differ between surveys
Two reputable FCA sources give different-looking numbers for the same year: Financial Lives reports 28% of adults holding life insurance, while the Pure Protection Market Study reports 36% (FCA Financial Lives 2024; FCA Pure Protection Market Study, January 2026). The gap is a good example of why a single headline percentage can mislead.
In our view, three differences explain most of it. First, the base differs: the market study interviewed adults with online access, who tend to be younger and better connected to financial products, while Financial Lives aims at a fuller cross-section of the population. Second, the definitions differ, with the market study grouping several products, including employer death-in-service cover, under a wider "life insurance" heading. Third, survey wording and timing can nudge the numbers. None of the figures is wrong; they measure slightly different things, which is why quoting the source and its base matters more than picking the largest number.
Ownership figures are only as clear as their small print. A survey of online adults counting employee benefits will tend to report more coverage than a broader population survey.
The protection gap
The recurring theme across the data is how many people hold no cover at all. In the FCA's Pure Protection Market Study, 42% of adults with online access held a pure protection product and 58% did not (FCA Pure Protection Market Study, January 2026). On the broader Financial Lives basis the shortfall is wider still, with around 46% of adults holding any protection product and the majority holding none (FCA Financial Lives 2024).
Awareness is part of the story. Among the 58% who held no pure protection, around four in ten (41%) had considered their protection needs in the past five years, while the rest had not thought about it at all (FCA Pure Protection Market Study, January 2026). Of those who had considered it, the most common reasons for not buying were cost, at 19%, other financial priorities, at 18%, and a sense of not needing it, at 17% (FCA Pure Protection Market Study, January 2026). The gap tends to be widest among younger adults, renters and lower-income households, though the exact ranking depends on the measure used.
What the numbers mean for estate planning
Read together, the data suggests that life insurance is common but far from universal, and that many families rely on a home and savings rather than a policy to provide for those left behind. With 28% of adults holding life insurance and most holding none, a payout is not something an estate can generally assume (FCA Financial Lives 2024). Where cover does exist, how it is arranged can matter as much as the cover itself.
One point often overlooked is that a life insurance payout usually forms part of your estate for inheritance tax unless the policy is written in trust, and inheritance tax is charged at 40% on the part of an estate above the available thresholds (gov.uk, as at July 2026, subject to change). Writing a policy in trust is a mainstream arrangement that many people use so the proceeds can pass outside the estate and reach beneficiaries more quickly, though it cannot guarantee a particular tax outcome and suitability depends on circumstances. Because a life policy is a regulated product, this is general information rather than a recommendation, and it can be worth discussing with an FCA-authorised adviser. Our estate planning guide shows how cover fits alongside wills and trusts, Inheritance Tax Explained covers the thresholds in more depth, and there is a dedicated guide to putting life insurance in trust.
Life insurance statistics in Scotland and Northern Ireland
The ownership figures on this page are UK-wide, because the FCA regulates protection products and surveys adults across the whole of the UK (FCA Financial Lives 2024). What differs by nation is not the insurance itself but the surrounding estate law. Scotland has its own succession rules, including legal rights for a spouse and children, and Northern Ireland has a separate but broadly similar system to England and Wales. How a policy interacts with an estate, and whether a trust is used, can therefore play out differently depending on where you live, so it can be worth taking advice in the relevant jurisdiction.
Sources and methodology
Every statistic on this page comes from a named source and was checked against the live publication in July 2026. Ownership figures are drawn from FCA research; the claims figure is Association of British Insurers data as quoted within the FCA's market study and is shown as a secondary source. Where the FCA notes that its Pure Protection Market Study surveyed adults with online access, that caveat is carried through here, because it explains why its figures run higher than Financial Lives.
- FCA, Financial Lives 2024 survey: General insurance & protection (fieldwork February to June 2024). Life insurance holding (28%), critical illness cover (13%), any protection product (~46%), pure protection holding (16.2 million / ~30%). fca.org.uk
- FCA, Pure Protection Market Study consumer research report (published January 2026). Product holdings among adults with online access: life insurance (36%), critical illness (18%), income protection (14%), pure protection held (42%) and not held (58%), reasons for non-ownership, and ABI claims data. fca.org.uk
- Association of British Insurers, protection claims (2024), as cited in the FCA Pure Protection Market Study. More than £5.3 billion paid in pure protection claims. fca.org.uk
- HMRC / gov.uk, How Inheritance Tax works: thresholds, rules and allowances. Standard 40% rate and the treatment of policies within an estate. gov.uk
Frequently asked questions
How many people in the UK have life insurance?
Around 28% of UK adults held a life insurance policy in 2024, according to the FCA's Financial Lives survey, making it the most commonly held protection product (FCA Financial Lives 2024, fieldwork February to June 2024). A separate FCA study of adults with online access put the figure higher, at 36%, because it groups several products together and surveys a different base Source: FCA Pure Protection Market Study, January 2026, subject to revision.
Why do life insurance ownership figures vary so much?
Different surveys measure slightly different things. The FCA's Financial Lives survey reports 28% of all adults Source: FCA Financial Lives 2024 survey, subject to revision., while its Pure Protection Market Study reports 36% of adults with online access and counts employer death-in-service cover as life insurance (FCA Pure Protection Market Study, January 2026). Neither is wrong; the base and definitions differ, which is why the source matters.
What is the protection gap in the UK?
It describes the number of people who could benefit from protection but hold none. In the FCA's market study, 58% of adults with online access held no pure protection product at all (FCA Pure Protection Market Study, January 2026). On the broader Financial Lives basis, most adults held no protection product of any kind, so the shortfall is significant however it is measured.
Does life insurance count towards inheritance tax?
Often, yes. A life insurance payout usually forms part of your estate for inheritance tax unless the policy is written in trust, and inheritance tax is charged at 40% on the part of an estate above the available thresholds (gov.uk, as at July 2026, subject to change). Writing a policy in trust is a common way to keep the proceeds outside the estate, though suitability depends on circumstances and it can be worth taking advice.
How much do UK insurers pay out in protection claims?
A substantial amount. Insurers paid out more than £5.3 billion in claims on pure protection products in 2024, according to Association of British Insurers data quoted in the FCA's market study (FCA Pure Protection Market Study, January 2026). Whether a specific policy pays out depends on its terms, so it can help to read the cover carefully or take regulated advice.
Do these statistics apply across the whole UK?
The ownership figures are UK-wide, because the FCA regulates protection products and surveys adults across the UK (FCA Financial Lives 2024). What differs is the surrounding estate law: Scotland has its own succession rules and Northern Ireland a separate system, so how a policy fits within an estate can vary by nation even where ownership rates are similar.
About Fairchild Oldfield
The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.
Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience and published data, not legal, tax or financial advice.
Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Life insurance and other protection products are regulated, and product choices should be discussed with an FCA-authorised adviser. Figures and rules are current or the latest available as at July 2026 and are subject to change or revision. Statistics are drawn from named sources and were verified live at the time of writing. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider their individual circumstances.
