Only 24% of adults in the UK with children under 16 have any form of financial protection, a significant drop from 31% in 2013, according to the latest research from the Scottish Widows Protection Report.
That’s an appalling and worrying trend.
No financial plan is worth a fig if it is not insured against the worst happening.
It gets worse……
54% of this group admitting that their savings would last just a couple of months if they were unable to work, a significant protection gap exists for families in the UK.
46% with children under 16 are now also reliant on two incomes, and a further 14% of this group state parents or grandparents are dependent on their income.
It is likely that there would be real challenges for these households if one income was lost.
Childcare costs are another area which can be impacted by the loss of one parent’s income, equally so if grandparents could not continue to provide support.
With more parents working and increasing childcare costs, up 27% since 2009, 40% of those with children under 16 rely on their parents to help with free childcare.
Much worse……
While some Government support is available in times of need, the current state bereavement benefits and support system is based on marriage or civil partnerships and doesn’t yet replicate the modern family we see today.
Unmarried couples and long-term partners are left in a welfare grey area – particularly when it come comes to looking after their dependent children following the death of a parent.
People are realistic about the support available, with only 1% of those with children under 16 believing the state would look after their family if something were to happen to them.
45% of this group also believe that individuals should take personal responsibility for protecting their income through insuring against the unexpected happening to themselves or a loved one. This awareness needs to be galvanised into helping people take action.
Our view
Sadly we’re not surprised that so many are playing fast and loose with their financial futures.
In today’s world insurance is not sexy and apparently not valued.
It is a very, very high risk strategy not to have protection policies in place should the worse happen.
And there’s very little anyone else is going to do to pick up the tab. This is a matter of personal responsibility.
The cost of proper protection should be treated as an essential not a luxury.
However, we believe, that insurance comes some way behind the latest smartphone / TV package / TV screen / car etc. in the list of “must haves”.
That’s a poor showing to say the least.
Sources: www.scottishwidows.co.uk (Press Release 2014/08/28)