The latest Scottish Widows protection report revealed that only 39% of Brits considered providing financial security for their family in the event of death as essential – which has dropped from more than half in four years – compared to eight out of 10 who considered broadband and mobile phones essential for daily living.
Meanwhile, just over a quarter of the 5,144 UK adults polled felt financial security for dependants in the event of becoming critically ill or a partner being unable to work was a necessity.
This slip down the financial priority ladder could leave a significant proportion of the 14.5 million mortgage holders in the UK and their families at risk of losing their homes by failing to have adequate protection in place.
The report found just a third of the UK population has a life insurance policy, fewer than one in 10 has critical illness cover and fewer than one in 20 has income protection insurance.
The age group where the largest proportion of people had protection was between 35 and 44, with those who had mortgages most likely to own financial protection products.
Almost 45% of 35-49 year-olds felt life insurance was essential, with 24% of the same group feeling that protecting their or their partner’s income was also essential compared to 18% of the general population.
Despite this, just under a quarter of those polled didn’t know how long they could pay the mortgage for or said they would run out of money within five months if they lost significant income.
Esther Dijkstra, head of protection at Scottish Widows, said: “The Mortgage Market Review has changed the way lenders look at our lifestyle and expenditure.
“This greater scrutiny, along with more people taking mortgages and potentially longer repayment terms means that we should be reassessing our financial priorities. Yet more people pay attention to making sure their possessions are insured than their own lives.
“Although short-term priorities tend to dominate when it comes to the way we assess our needs and spending, it is more important now than ever to have an appropriate plan in place at the right time to protect our homes and families, not only for peace of mind but to safeguard the time and money we invest throughout working life for the future.”
