Third of families have no safety net for loss of income

Almost two thirds of households (60%) do not even expect to receive any financial support from family or friends, and nearly half (48%) lack any form of protection insurance.

For those that do have a financial strategy, saving is the most common approach – 41% of households identified this as their strategy. However, the average family has just £660 in savings, and higher living costs mean that this is an increasingly difficult option for many. The research is based on a survey of 2,478 consumers.
 

Other key findings included that over half of 18-24 year olds have no financial safety net, with older respondents better prepared - only 28% have no strategy in place to deal with financial hardship. The average household expects just £155 in monthly support from friends and family – enough to cover just 10.9% of essential spending, and only 12% of households have an income protection insurance policy in place.

Duncan Finch, Executive Managing Director, Legal & General Insurance, comments:

“British families remain in a financially precarious situation despite signs of recovery in the UK economy. Daily financial pressures mean that many households are unable to put enough money aside as a safety net. Unfortunately 60% of households are unable to rely on either family or friends for financial support and changes to the welfare system will reduce the ability of the state to assist in a financial catastrophe. Clearly there are some worrying gaps when it comes to UK consumers planning their personal finances.”

"Cutting back on saving and protection insurance may save money to meet bills in the short term but is not a good idea over the long-term. Encouragingly, our research shows that 31% of households do indeed have critical illness or life insurance cover. However, it’s crucial that those families without protection have a comprehensive financial strategy so they are well placed to deal with financial hardship.”