New research from the Scottish Widows Protection Report reveals three out of five (60%) households with dependent children are reliant on two or more incomes to make ends meet, and with an increasing amount of personal debt, things are unlikely to get better for these families. Overall, 44% of UK households rely on more than one breadwinner to maintain a comfortable standard of living.
The average household with dependent children has £91,648 still outstanding on their mortgage compared to £88,500 last year. Those with no children have significantly less mortgage debt, with an average debt of £73,293, and have managed to reduce it from £77,500 last year. When it comes to short term debt, the average household with dependent children has carried over £8,653 over the last 3 months compared to an average of £7003 for those with no dependant children.
This reliance on two incomes to run the family home means millions of households are leaving themselves at risk of being unable to survive financially if one of the bread winners become unable to work as a result of critical illness, death, disability or due to an accident. Furthermore, the research shows 62% of Brits have not protected themselves for the long term should the worst happen and they lose their household’s main income.
Commenting on the findings, Scottish Widows’ protection director Clive Allison said: “The increase of debt for those with dependent children is worrying. People are leaving themselves exposed to a lack of income should anything happen to the main breadwinner, and large personal debt to repay on top of this could make things even more difficult. Families need to make sure they protect themselves financially so if they do get into difficulties they have the vital back up in place to look after their families and loved ones. If households do not have sufficient protection, such as life cover and critical illness cover for any of these circumstances, many could be left struggling.”