A significant number of British people do not have adequate safeguards in place to protect themselves from the financial impact of a long-term absence from work due to illness or injury.
That’s one of the key findings of a survey conducted by Censuswide on behalf of insurer Cirencester Friendly.
The Censuswide survey of more than 2,000 adults found over half (54%) of people do not think their savings would last more than three months if they were out of work – this represents an increase of almost one third from 2014, when this figure was just 41%.
Furthermore, the number of people whose savings would last more than six months has fallen by almost half from 31% in 2014 to just 16% this year.
And it is people aged 45 or over that are feeling increasingly financially squeezed today, according to the research.
In 2014, 39% of people aged 45 or over said their savings would last more than six months if they were unable to work due to injury or illness, compared with just 25% in 2016. In addition, findings this year show that the over 45s are also the age group most likely not to save any money each month (34%), compared with the national average of 28%.
Commenting on the findings of the survey, Rebecca Young, Head of Marketing at Cirencester Friendly, said they “paint a concerning picture of the finances of the population, with people’s savings today lasting dramatically less than in 2014. If you are unable to work due to illness or injury, the amount of money provided by the Government via Employment and Support Allowance (ESA) is just over £70 each week – this has decreased by nearly £30 per week in the last two years. At the same time, the number of people with long term savings has dropped by nearly 50%.”
Young added that the UK is a nation that is “financially underprepared” when it comes to safeguarding against the effects of long term absence and it is “essential” that people understand the options that are available to them to protect against the “unexpected.”
Also of concern is the fact the survey found that less than 2% of British people understand the duration of long-term income protection and often over-estimate the support provided to them by the Government should they find themselves unable to work for a prolonged period of time.
Just 1.6% of people were able to correctly identify the length of time long-term income protection would last.
The reality is that most contracts pay out until retirement. However, 65% of those surveyed thought that this protection would last 10 years or less (if taken out aged 30) and 45% thought it would not last longer than 5 years.
In fact, Brits are twice as likely to pet insurance (21%) as they are to buy their own income protection (10%). More people would even purchase insurance for their mobile phone (16%) than insure against accident or illness preventing them from working.
Premier Choice Group pro-actively encourage all of our clients to consider the significant impact any long term absence would have on them.
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