Young adults are most vulnerable to financial shocks because they have a lack of savings, no income protection and are commonly saddled with debt, LV= research indicates.
The insurer found that over half (55%) of 25-34 year olds fall short of the Money Advice Service (MAS) recommended amount of savings to be financially resilient.
What is more nearly half (45%) would only be able to cope for one month or less without their income.
Justin Harper, head of policy for protection at LV=, said: “It’s clear that people in ‘Generation Debt’ are at risk of finding themselves struggling to make ends meet if they lost their income.
“With nearly half of older Millennials stuck in the cycle of renting, they’re missing out on the traditional touch-point of considering protection products when buying a home and as a result are more likely to have misconceptions about their real needs, advice and products.
“It’s vital this generation isn’t overlooked, and industry and government works together to ensure more people are able to increase their resilience to financial shocks both in the short and long term.”
Young people are under no illusions as to their situations, as more than two in five (44%) aren’t confident in their ability to handle a personal financial crisis compared to the UK average of a third (33%).
Student debt is seen as the biggest obstacle to saving by two in five (40%), while half (51%) have some form of unsecured debt and one in five (20%) owe more than £5,000.
Less than one in 10 (7%) have an income protection policy to fall back on if they lost their income