Half (50%) of the UK’s mortgage holders have no life cover in place leaving themselves and their families financially exposed if the unforeseen were to happen, research from Scottish Widows has found.
With 8.2 million people exposed through lack of life cover the research also shows that only a fifth (20%) have a critical illness policy, leaving many more millions at risk of financial hardship or losing their home if they were to become seriously ill.
A third (33%) admit that if they or their partner were unable to work for six months or longer due to ill health or personal injury, they’d be unable to live on a single income. And more than two-fifths (43%) of those who couldn’t cope with a single wage say they would resort to dipping into their savings in order to survive.
Yet 43% say their savings would last for no more than a couple of months and 15% don’t even know how much they have.
Johnny Timpson, protection specialist at Scottish Widows, said: “None of us want to think about the worst, but our findings show that there are an alarming number of mortgage holders who are putting themselves at significant risk by failing to arrange cover for the unexpected.
“Many people believe that they’ll be able to rely on the State if the unforeseen happens, but recent cuts to welfare benefits are exacerbating their vulnerability.”
Additionally the research found that just under a quarter (23%) could only afford to pay household bills for a maximum of three months if they or their partner were unable to work, and 23% could make a maximum of just three monthly mortgage payments. Another 15% admit they’re not actually sure how long they’d be able to cope with their mortgage payments.
Chris Gowland, mortgage director at Halifax, added: “Taking out a mortgage is the biggest financial commitment many of us will ever make, so it’s concerning to see that only half of the UK’s mortgage holders have taken out life assurance, and even fewer have critical illness cover.
“Having a financial plan in place will help protect your home in this type of eventuality and give greater peace of mind when it comes to what may be your greatest financial investment.”