Scottish Widows warn ‘exposed’ mortgage holders
Just half of mortgage holders own life insurance, down from 54% last year, meaning a greater proportion are at risk if the unforeseen were to happen.
Nearly a fifth of mortgage holders have no idea how they would cover their household bills if they or their partner were unable to work due to incapacity, serious illness, an accident or death, while just under half (48%) said their savings would last just a couple of months.
Many over-estimate the support they would receive, as nearly two thirds (64%) believe their employer will pay them either a full salary or a full salary followed by a partial salary if they are off work for a long term, yet the reality is that people may be eligible for Statutory Sick Pay at £87.55 for up to 28 weeks.
Richard Jones, annuity and protection director at Scottish Widows, said: “Protecting a home is about protecting a way of life that encompasses family, community and often a business.
“With this in mind, the impact of losing a home could be even greater than we initially realise. Whilst affordability cannot be ignored, people with mortgages do need to review and develop a more robust plan to ensure they are protected should the unforeseen happen.
“It’s all about making sure you have the right cover at the right time of your life, giving people the peace of mind that their families will be able to keep their home and be financially covered come what may.”
Just 17% have critical illness cover, down from 20% in 2013 while 7% hold income protection, a drop of 3% from last year.
Mortgage holders now spend £1,393 each month on household costs on average compared to £1,326 last year.
Around 14.5 million UK adults have a mortgage.