Recent research conducted by Aviva has highlighted a lack of disposable cash among UK households which could cause problems should those earning the income suffer a serious illness. Their research found the average British household would run out of money in less than 14 days if the income earner were diagnoses with a critical illness and unable to work, a staggering one in four said they would only be able to access an additional £100 without further borrowing.
The Findings
Without further borrowing, the average British household could access only £914 of disposable cash, less than two weeks of the average weekly household expenditure of £471. Should your average UK households income cease due to a critical illness or serious injury very quickly could the monthly financial obligations such as mortgages, rent or credit card payments become difficult to meet.
Are we under-insurered
It was also highlighted that your average british household is under-insured with only 37% of households covered by life insurance or critical illness cover. The research showed given the lack of protection many Britons should they need to raise alternative income would consider selling their largest assets, one in five would be willing to sell their home, while a third would give up their car.
Is protection our responsibility?
The majority of those polled consider it their personal responsibility to protect against any loss of income, however 17% feel the Government has a role to play covering any loss of income due to a serious illness or death, those believing the state has them covered may be surprised that the maximum they could expect from the government is £95.15 per week.
What the experts say
Louise Colley for Aviva says, “The majority of British people see it as their responsibility to cover any loss of income in the case of them not being able to work due to a critical illness or death; but most simply don’t have enough money to see them through this period.
It is worrying how little money Britons would be able to access without further borrowing, and how big the shortfall could be when we consider how much a critical illness or bereavement could actually cost. Money worries are the last thing a family would need at such a distressing time, so we would encourage everyone to take the time to consider life and critical illness cover to make sure they have adequate protection in place.”
Your Options
If you are considering your financial protection and require some further information or need som direction then please do not hesitate to get in touch. We can provide advice on a wide range of personal insurance and as we are independent we can review the all the leading insurers when requesting a life or critical illness quote.
The Financial Services Authority have produced a very useful website for consumers when considering their money matters including financial protection, visit Money Made Clear.
