Half of the UK’s working population would feel more financially resilient if they had insurance to protect their income against illness or injury, according to new research from LV=. Despite this, only 27% of workers currently hold an income protection policy.
The findings, published in LV=’s third Reaching Resilience report to coincide with Income Protection Action Week, highlight widespread financial dependency.
On average, each worker supports three dependants, while three in ten also care for a pet. Almost half of working couples rely on both incomes to cover monthly expenses, rising to 70% among workers aged 18 to 24, leaving many households vulnerable if one partner is unable to work.
Rising debt and low savings compound the issue. Average household debt has increased by £1,734 in the past year to £20,640. A third of workers have less than £5,000 in savings, nearly a quarter have less than £1,000, and almost one in ten have none at all. LV= says income protection can provide essential financial security by delivering a regular, tax-free income to cover costs such as rent, mortgage payments and utilities during periods of illness or injury.
Mike Farrell, protection sales director at LV=, said: “We’re proud to support the IPTF this week to highlight the need for Income Protection which has never been more pressing. As the cost-of-living crisis continues to affect households across the UK, people are becoming increasingly aware of their financial vulnerability and the critical role that income protection insurance can play.
“With rising energy bills, rent and mortgage costs, having an Income Protection policy can offer clients essential financial security if they are unable to work.
“Our portfolio is designed to support tailored financial planning, and we remain committed to helping our customers build both emotional and financial resilience, helping them face life’s challenges with greater confidence and peace of mind.”
Jo Miller, managing director at the Income Protection Task Force, added: “Despite growth in income protection sales over the last few years, there is still some way to go until anywhere near enough people have the cover that they need to be financially resilient should the worst happen.
“LV’s research highlights why income protection should be the foundation of all financial planning and supports the work that we are doing at IPTF through IPAW and other initiatives to support advisers to have better quality conversations with their clients.”
This story was first published on our sister title Workplace Journal.
