Almost 5m renters in the UK have no plans in place to cover their rent if they became too ill to earn for three months or more, even though recent cuts to housing benefits could leave them at risk, according to Royal London.
In a YouGov poll commissioned by the provider of 2,009 UK adults in February, more than a quarter of renters in paid employment said they knew someone who had struggled to pay housing costs due to illness.
More than a third of renters in paid employment admitted they did not know how long they could survive, while 60 per cent said they could only survive on their savings for three months or less.
Their first port of call would be to apply for state benefits (53 per cent), followed by reducing their household expenses (47 per cent) and then dipping into their savings (39 per cent).
Only 7 per cent of renters in paid employment have ever consulted a financial adviser, with the most common place people turn to for financial advice is their family and friends.
Debbie Kennedy, head of protection for Royal London Intermediary, warned that cuts to housing benefit meant more people would not get their rent paid in full if their income fell unexpectedly.
She said: “It would be bad enough to be taken ill, without the added anxiety of getting behind with the rent and facing possible eviction. Income protection may be more affordable than people realise and can provide a financial safety net and enable people to focus on getting better.”
|Cuts impacting those unable to work due to sickness:|
|Extension of ‘shared accommodation rate’ from the under 25s to under 35s, meaning most single people under 35 can now only get housing benefit to cover the cost of a room in a shared house, even if they are renting accommodation of their own|
|‘Bedroom tax’ means that people renting from councils and housing associations cannot get their full rent covered if they have a spare bedroom; this principle is already part of the rules for private tenants who can only claim up to the rent for a house of the size they are deemed to need|
|Private tenants are only able to claim a ‘local housing allowance’ in their area, based on the lowest 30 per cent of rents|
|Overall caps on the amount of benefit a family can receive being steadily lowered with any excess deducted from an individual’s housing entitlement|
Citing PricewaterhouseCoopers research from last summer, Royal London stated there would be falling levels of home ownership and rising levels of private renting over the next decade.
In 10 years’ time, 59 per cent of 20-39 year olds will rent privately, up from 45 per cent in 2013, with a further 15 per cent in social housing, renting from housing associations or local authorities.