With as many as 29% stating they have no savings whatsoever and in general significantly less holding a pension, ISA, or other investment compared to those with a mortgage, private tenants have a lot to lose if they or a partner are unable to work.
A further 31% said their savings would last just three months at the most to pay household bills, emphasising the importance for many to have adequate protection cover in place.
Tenants with any savings, potentially for a deposit, may have to rely on them to cover day-to-day living costs if unable to work through illness or disability. Any lump sum savings are means tested for benefit applications and taken into account in what people receive in support.
Currently almost 8 million UK adults rent privately in the UK and with house prices rising and tougher mortgage application rules, this number is only expected to keep increasing.
Taking out a mortgage to purchase a house is still too often the trigger point for financial planning through the purchase of a protection product, be it as an individual or family. With more people renting, this traditional trigger point is being missed and often means people are just not aware of perhaps how financially exposed they are.
Richard Jones, protection director at Scottish Widows said: “The location of where people rent is an increasing important decision often dictated by work and family life.
“Those renting have the most to lose as they have the least savings and therefore the least resilience, and any lump sum saving could be lost to living costs if the unforeseen were to happen.
“Those in private rented accommodation, more than any other group, have a real protection need and insurers must work hard to demonstrate that financial protection is about protecting their family life and home whether they own it or not.”