EDINBURGH, SCOTLAND, July 15, 2009
/24-7PressRelease/ -- New research from Scottish Widows shows that 30 million Brits have not protected themselves for the long term should the worst happen and they lose their household's main income and only a quarter (25%) believe they would be completely protected in this situation.
Comprehensive research from Scottish Widows, which was carried out on 6,209 UK adults2, shows that many people could find themselves without a safety net if the household lost its main income due to
critical illness, serious incapacity or death. When asked how they would survive financially in this situation, 45% of Brits said they would use
their savings if they or their partner were unable to work for 6 months or longer due to ill health and personal injury, critical illness or a serious accident and 42% said that on their death, their partner and family would have to fall back on savings to cope with the loss of an income.
However, the research showed that almost two thirds (63%) of people who plan to fall back on their savings in this situation only have between GBP500 and GBP1500 saved up - meaning that any reliance upon their savings would not last long. A large number (68%) of Brits also said that they are concerned about the effect the recession will have on their ability to save, a combination of inadequate savings coupled with a lack of protection could leave many seriously at risk.
Richard Jones, protection market director at Scottish Widows, said: "No matter what the economic climate, illness, accident or death can occur at any time. Seeking financial advice and taking out protection to meet your needs can provide a financial cushion when you need it most. The lack of protection coupled with peoples tentative approach to saving in the current difficult economic climate could result in families and dependents taking radical steps to make ends meet if illness, accident or death affects the household income."
Luxury vs. necessity
Furthermore, the research shows that many people regard protecting themselves against the financial impact of illness as an extravagance as opposed to a necessity. More Brits think of their mobile as a necessity (54%) compared to income protection (39%) and if forced to cut back financially, nearly a quarter (22%) of Brits would cut back on their critical illness cover indicating that the nation's financial priorities may be skewed.
Of those surveyed, 61% stated that protecting an income should they/their partner be unable to work would be a "luxury," with 56% regarding critical illness cover in the same way. Other items viewed as "luxuries" included weekly nights out (85%) gym memberships (94%) and an annual holiday (53%).
Richard Jones continued: "It is interesting to note the choices people are making during these difficult financial times. The fact that people rank financial protection, such as critical illness cover, alongside eating out and gym membership, shows that they aren't truly assessing the risks they could face if the unexpected happens.
"Although it is unsurprising that 90% of respondents ranked paying household bills as their top financial priority it's important to remember that these are the very items which could go unpaid, should the worst happen, leaving people and their loved ones in a potentially vulnerable position financially."
Scottish Widows provide a wide range of financial services including
life insurance,
pensions and
individual savings accounts (ISAs).
Source: Scottish Widows
Website:
http://www.scottishwidows.co.uk---
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