According to research examining the country's protection 'gap' suggest, half the UK population would be penniless within a month if their income dried up. The study, conducted by insurance giant AXA, suggests that half of us have very little in savings or investments and would struggle to cope if we are unable to work.
Just 45% of us have any form of protection insurance in place to cover our main income should it be taken away, and only a third of us believe we have enough provision in place to cover our mortgages.
Estimates suggest that the average monthly expenditure per household is around £450 yet 49% of us have less than £1,000 saved up and 72% save less than £100 a month. Despite this, people still expect to have to cover additional expenses in the future such as funeral costs (62%) and children's education (42%) with no extra financial provision over and above this amount.
Insurance products such as income protection and critical illness are designed specifically to provide financial support if illness, injury or, in the case of critical illness, a serious illness stop us from working normally. It comes as no surprise, given the current climate, that people also told the researchers that they were reluctant to invest in such products but, as the figures show, not doing so could end up costing far more.
Mark Taylor Cert PFS, IM Financial Solutions Ltd.
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