More than 12 million Britons are without a financial back-up plan, according to figures released from Bright Grey's annual Financial Safety Net report.
Almost two-thirds (60%) of the adult population say they do not have any financial protection in place should the worst happen. Despite the problems that could arise from a loss of income, four out of ten people without insurance (43%) have said that the cost of cover is too great an expense to bear.
With premiums costing as little as £5 a month it seems that many people may be overestimating how much a life or critical illness policy would set them back. However, for some it is simply not a priority; one in ten (12%) have admitted that they prefer to spend their money on other things, with the average family spending £17 on their pets, £7 on chocolate and £28 on digital television servicesevery month.
Nearly a quarter (24%) accept that they would have to drastically reduce their living costs in order to survive, in the event that the main breadwinner was diagnosed with a serious illness, suffered a disability or died - demonstrating the value of cover in helping to maintain an everyday standard of living.
Jennifer Gilchrist, senior product development manager, Bright Grey said: "Everyone needs to treat themselves from time to time but by not building up a financial safety net, many could find their entire quality of life compromised by illness or even the death of a family member. It is particularly concerning that a quarter of all people have not even considered what they would do in the event that something like this might occur."
One in five people (22%) would rely upon their savings in the event their income should cease. The average amount of savings that Britons can access immediately is £9,883, which is a £1,170 increase on figures from 2012, but still is unlikely to support a family for long considering that the average UK household expenditure exceeds £2,000 a month***. Meanwhile, a quarter (25%) has not considered how they might cope with a ‘worst-case scenario', and a small minority plan to rely exclusively on government support.
Jennifer Gilchrist, concluded: "The high cost of living combined with a lack of adequate protection means that many could find life extremely difficult without a source of income. Watching a loved one experience an illness, or losing a family member, is difficult enough without additional financial stress. Ensuring that a realistic and viable contingency plan is in place will ensure that families can have peace of mind."
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