Last week I wrote about the challenge facing young professionals in terms of their need for and access to financial advice. I received a tweet asking where I felt income protection fell on that scale, and to be honest, it’s got to be right at the bottom. Of all the overlooked areas of finance, income protection is possibly the most neglected, and never more so than for young people.
It is regarded as one of the most important forms of protection, and yet according to the Association of British Insurers, just 9.4 per cent of UK workers have taken out this kind of product. To my knowledge, I don’t know anyone my age who has even considered income protection, let alone take it out. The minimum age for these policies is generally 18, and my peer group are well past that.
Many of us had to fight hard for our jobs, and many have undergone long periods of unemployment, relying on benefits. Jobless figures are still shocking, and the threat of redundancy weighs heavy on the minds of all but the most comfortable. Taking all that into consideration, then, it is surprising that income protection is such a low priority for so many young people.
Low priority or complete mystery? That is another question. Of all areas, protection is the one where we could do with the most education and encouragement. Given how useful income protection could be to so many young professionals for lots of reasons, it strikes as troubling that it’s completely under the radar for most.
When there are potentially helpful products out there that large swathes of the population do not even know exist, there’s a problem with marketing and communication that needs to be resolved. How can we make informed decisions about how to cope in times of financial emergency if we have no idea the product exists?
