Why high-earning women need a backup income plan

Published 15 October 2025

It feels good to know you are doing well financially. You may be in a senior role, leading a business, or finally enjoying the rewards of years of hard work. But many high-earning women quietly worry about: “What if something happens to my income?”

Relying on a single, high salary can feel like walking a tightrope. If redundancy, illness, or an unexpected career shift cuts that salary, the impact can be huge. Lifestyle commitments, mortgages, family responsibilities, and even your long-term wealth plans can suddenly feel fragile.

That is why having a backup income plan is so important. It is not about expecting failure, it is about protecting your success. In this guide, we will explore why high-earning women need a backup, what your options are, and how to design an income plan that feels safe, sustainable, and aligned with your goals.

Why a salary is not enough

Lifestyle inflation and commitments

The more you earn, the more you may spend. From larger homes to more expensive holidays, to eating out more. These are not luxuries, they are often commitments that cannot be cut overnight.

Vulnerability to sudden change

Redundancy, restructuring, or health setbacks can wipe out a salary in weeks.

Gender pay and pension gaps

Women already retire with smaller pensions on average. If a high salary stops unexpectedly, the gap could be wider.

What a backup income plan could look like

A backup plan is simply other streams of income that step in if your main salary disappears.

• Protection policies (such as income protection if you are too ill to work)

• Investment income from investments and pensions

• Property income (rental income, REITs)

• Passive income (digital products, royalties)

• Business income (side ventures or consulting)

Each of these adds a layer of resilience.

Step 1: Protect your income with insurance

Before exploring side hustles or investments, start with protection.

• Income protection insurance pays if illness stops you working.

• Life and critical illness cover protect your family if the worst happens.

These are the foundations that make everything else less risky. And without it, your plan may fail.

Step 2: Build an emergency fund

Every woman needs a cash cushion. A general rule of thumb is 3–6 months of essential expenses in an easy-access account, earning you as much interest as possible. This gives you breathing room while other income streams kick in. This figure is just a rough guideline and you may need more if you are self employed or have a family for example.

Step 3: Build future investment income

• Dividends and funds: A portfolio of dividend-paying shares or income funds can provide regular payouts.

• Investments and pensions: Tax-efficient wrappers grow your money faster, and with careful planning, you can set up regular withdrawals to provide an income stream.
  

Step 4: Explore property income

• Buy-to-let property for rental income. Make sure the numbers make sense after you consider any cost of borrowing and tax on rental income and on sale.

• Real Estate Investment Trusts (REITs) for a hands-off option. Consider if there are liquidity issues and if you have to wait to access money.

• Downsizing or releasing equity later in life as part of your retirement plan.
  

Step 5: Add passive income streams

Not every backup needs to be tied to markets or property.

• E-books, courses, or digital products.

• Royalties from creative work.

• Affiliate income or online ventures.
  

Step 6: Consider business or consulting income

Some of my clients have specialist skills. Consulting, mentoring, or part-time business ventures can be backup income that fits your expertise.

Step 7: Review and rebalance regularly

Life changes fast. Promotions, career breaks, family needs. Review your backup income plan every year. Adjust your protection levels, update investments, and rebalance your portfolio.

How to avoid common mistakes

• Waiting until crisis hits before acting.

• Relying on one backup stream instead of diversifying.

• Ignoring tax implications.

• Choosing complex options that you do not have time to manage.
  

Why women in particular need a backup

• More likely to step out of work for caring responsibilities.

• Higher risk of part-time or self-employment transitions.

• Longer life expectancy means your income needs to last longer.

Backup income is not a luxury, it is essential protection.

Quick takeaways (TL;DR)

• A high salary is powerful, but fragile without a backup.

• Backup income streams include protection, investments, property, passive income, and business ventures.

• Start with insurance and an emergency fund, then build outwards.

• Diversification reduces risk and builds confidence.

• Regular reviews ensure your plan grows with you.

Conclusion

Being a high-earning woman is a position of strength, but it can also bring vulnerability if your income stops unexpectedly. A backup income plan ensures that your lifestyle, family, and long-term goals do not collapse if change comes suddenly.

You have worked too hard to leave your success unprotected. By putting a plan in place now, you gain confidence, freedom, and peace of mind.

If you are ready to explore your options, book a no-obligation call with Shalini Kanap, female financial adviser, and let’s build your personal backup income plan together.

FAQs

1. Do high-earning women really need a backup income plan?
Yes. The higher your commitments, the more vulnerable you are if your salary stops.

2. What is the first step to building a backup plan?
Start with insurance such as income protection and an emergency fund.

3. Are passive income streams realistic for busy women?
Yes, but they need upfront effort. Start small and grow over time. See How to create passive income streams that actually work.

4. How much should I keep in an emergency fund?
As a rough guide, for 3–6 months of essential expenses in easy-access savings. This could be more if you are self-employed or have a family for example.

5. Should I prioritise investing or insurance?
Ideally both: insurance protects against shocks now, investing builds future resilience.

Coming up on the blog soon

• 7 smart investment moves for women in their 30s and 40s

• Why women are often better investors than men

• How much do you really need to retire comfortably?

• How to create passive income streams that actually work

• How to protect your income when you are self-employed

• The role of income protection insurance: what every woman should know

• How to safeguard your salary if you’re made redundant
  
  

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

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