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Lack of financial safety net puts families at risk

Lack of financial safety net puts families at risk

Category: Insurance

Updated: 25/11/2010
First Published: 24/11/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Breadwinners have been urged to think about what might happen to their families financially if they were unable to work for a prolonged period of time.

Around six in ten Britons have no financial safety net in place, according to a new report from Scottish Provident, with a third admitting they would have to drastically cut back on living costs should the household's main source of income dry up.

At present, just over a third (35%) of the nation has life cover, but the levels of other forms of financial protection products are significantly lower.

Only 13% have critical illness cover, which pays out a lump sum in the event of suffering a serious illness.

Meanwhile, just 9% of Britons have income protection, which would provide a regular income in the event of being unable to work.

Despite the current economic troubles, a mere 5% of those surveyed had unemployment benefit.

More than a third of consumers (39%) claimed the main reason for not having any cover was due to it being too expensive, although the figure rose to 47% when only those with dependents were considered.

Worryingly, 17% claimed that they did not know why they had no protection in place for themselves and their family.

"With the majority of Britons without any form of protection in place, many are taking a substantial risk with their own and their family's livelihoods," said Susan Barclay, head of marketing at Scottish Provident.

"Therefore, we are launching the Financial Safety Net campaign in order to encourage more people - especially those with dependents - to take action and put their own 'financial safety net' in place.

"The campaign is aimed at encouraging consumers to assess their personal situation and put emergency savings in place."

Life insurance and income protection insurance is not as expensive as many people think, with plenty of providers offering cover which won't break the bank.

Moneyfacts.co.uk has teamed up with Life-Quote enabling you to quickly and easily compare life insurance deals from a number of different insurers.

Not only will you receive a free, no obligation life insurance quote tailored specifically to your individual needs, expert help and advice to make sure you find the best life insurance deal is available too.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

 
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