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Less than a Quarter of Families have Income Protection

A study from Scottish Widows has revealed that more than three-quarters of families in the UK with children under 16 are without income protection, up from 69 per cent in 2013.

This further highlights the increasing protection gap, and is based on the results of a major survey with more than 5,000 respondents. On top of this, over half of those who have children admitted that their savings would last no longer than a couple of months if they were unable to work.

Nearly half of those with children under 16 are reliant on two incomes, while 14 per cent admitted that parents or grandparents are dependent on their income.

The majority of protection customers, some 75 per cent of critical illness and 69 per cent of income protection, have a mortgage, highlighting the emphasis that is placed in protecting repayments by homeowners. However, out of all of the respondents who had a mortgage, only 50 per cent had any life cover, just 17 per cent has critical illness cover, and 7 per cent an income protection policy.

Earlier in the year, a separate study carried out by YouGov on behalf of Friends Life showed similar results to this one, with only 4 per cent of respondents saying ‘yes’ to having an income protection policy, 7 per cent critical illness cover, and 23 per cent life insurance.

Esther Dijkstra, head of protection at Scottish Widows, said: “We can’t ignore the financial pressures currently being faced by a large number of UK households, with families often supporting children and parents at the same time, whilst also relying on two incomes.

“It’s not always the easiest topic to discuss, but it is one people should take time to think about and set up robust protection that adequately supports their family and safeguards their future.

“The industry also needs to continue to educate people about the importance of financial protection to help convert awareness to action”

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