Written by Barclays Bank
Monday, 01 December 2008
Despite the level of fear surrounding unemployment and debts in the current environment, research pubiished by Barclays Financial Planning shows a worrying trend of people not providing themselves and their families with a safety net.
Over half of people in the UK are worried about being able to maintain their outgoings within the next 12 months, pushing essential safety nets like income protection and critical illness cover to the bottom of their priorities. Results show, nearly half (47 per cent) of UK adults have no protection policies4 in place whatsoever to protect them and their families in the event of losing their income, health issues or even death.
The safety net gap:
· 52 per cent have no life insurance
· 75 per cent have no critical illness cover
· 78 per cent have no income protection cover
Those aged between 35 and 54 often have the most responsibilities in terms of dependants and outgoings, but showed a large gap in their protection cover, with 45 per cent having no life cover and 74 per cent with no income protection insurance.
Alison Tattersall, Head of Customer and Proposition at Barclays Financial Planning said: "When finances are tight it is often responsibilities like protection policies that fall to a lower priority, and of course these policies protect outcomes that people don't want to think about. But people must consider the financial consequences of what would happen if they were unable to work, or their dependants situation if they died, it would be far worse than any concerns they currently have over struggling to meet their outgoings.
"Our research indicates that a large number of people are without any protection at all, or that they don't realise they have any policies in force. Both are equally as worrying, especially the current climate."
When looking at what other safety nets people could be relying on, the research reveals that 60 per cent of people admit to having nothing saved, having less than one month's salary in the bank, or not knowing what they have in savings at all. Worryingly the report also reveals that nearly 40 per cent of people don't receive benefits such as sick pay, death in service or health insurance, or simply do not know if they would be entitled to them. Coupled with 81 per cent of people not knowing what they would receive in benefits from the state if they were too ill to work, it shows that many people haven't thought through their plan b.
Alison Tattersall continues: "This is a worrying trend. People need to know what their state and employee benefits are before they are able to plan their protection needs properly.
"Over half of people that do have protection policies said they did not take advice or did not know if they had taken advice when buying their cover, and over 70 per cent do not know or only have a rough idea what level of payout their policies would give them if a claim was made. This could clearly mean people end up without the right cover for their needs, which is often just as bad as having no protection at all. We urge people to seek professional advice and review the level of protection insurance they have to cover themselves or their family."
