Protection  

Most people 'lack financial safety net'

Most people 'lack financial safety net'

The majority of the UK population do not have any form of financial protection in place and a fifth believe the cover is too expensive, an Aegon report has found.

In a recent survey, the provider found 70 per cent of adults in the UK have no form of financial cover and 66 per cent would not consider buying a protection policy such as life insurance, income protection or critical illness.

Aegon estimated the figures leave 36 million people without financial protection for themselves of their families in the event of death or serious illness.

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The research found 19 per cent deemed protection policies to be too expensive, with 45 per cent of people preferring to rely on savings in the event of a main earner being unable to work.

Simon Jacobs, head of underwriting and claims at Aegon, said protection cover could help people meet their monthly expenses when unexpected events occur.

He said: "The reality is that far too many people in the UK are putting themselves and their families at unnecessary risk by not taking steps to financially protect themselves.

"Across the UK, people insure their homes, pets and their mobiles but overlook the vital component that funds all of their day-to-day spending – themselves."

Mr Jacobs said it was worrying to see so many people relying on their savings for financial protection.

He said: "Between five and ten pounds a month is surely a price worth paying for increased peace of mind."

In its money statistics report released in August, The Money Charity found 9.79 million households in the UK - 36 per cent - had no savings and 3.54 million - 13 per cent - had less than £1,500 in backup funds.

Mr Jacobs said: "A little protection insurance is better than none at all - there is a clear need for the industry to get this message across to more people.

"Providers and advisers need to work together to make sure that people have a lifetime of financial security and don’t get a nasty shock at the worst possible time."

Aegon’s research surveyed 1,300 adults aged 18 and above in August.

rachel.addison@ft.com