In today's uncertain economic climate, ensuring financial security is more important than ever.
In today's uncertain economic climate, ensuring financial security is more important than ever. According to a recent report1, 69% of workers in the UK feel financially resilient, which is a 4% increase from last year. Despite this, only 52% have a Protection policy in place, leaving a significant number of workers financially vulnerable if the unexpected happens.
The Reality-Many Workers Are Unprotected
The average UK household has around £20,640 in debt (this is excluding mortgages) and this figure rises to £28,908 for self-employed individuals. The average worker will be supporting 3 dependents, yet only 7% have a protection policy in force. Additionally, 42% of UK households would only be able to survive for up to 3 months without an income, highlighting the important of Income Protection . A concerning number of people could potentially find themselves in a vulnerable financial position if they are unable to work.
What’s Your Plan B?
When the workers were asked how they would manage financially if they were unable to work for 2 months or more, 47& of workers said that they would be able to rely on their savings. Meanwhile, 32% would depend on sick pay from their employer and 19% said that they would turn to their partner fir support. However, with the right Income Protection Insurance in place, there is no need to exhaust your savings pot or place financial strain on your loved ones. An Income Protection policy ensures that you continue to receive a monthly income until you recover and return to work or the policy term ends.
Don’t Just Rely on Sick Pay
1 in 5 employer workers didn’t know what their sick pay arrangements were. More than half of those who thought they were entitles to sick pay, realised that they were actually only entitles to support for 12 weeks or less. Even though sick pay is a valuable safety net, it is not likely to be enough to help you pay your bills in the long run. The Statutory Sick Pay for the 2024/2025 tax year is £116.75 per week, this is unlikely to cover essential bills and expenses for most households.
The Challenges for the Self-Employed Population
Self-employed individuals seem to be even more financially vulnerable, with 19% saying that they would have to continue working if they are injured or ill, compared to the 12% of those who are employed. 1 in 4 self-employed individuals have savings of less than £1,000, while 29% could manage for less than a month if they were unable to work. As a result, 17% would have to rely on their parents for financial support.
Get Informed and Get Covered
It seems that, while financial confidence among UK workers is on the rise, this does not necessarily mean that the UK population is adequately protected. Mike Farrell, Protection Sales and Marketing Director at LV, commented, “While it’s encouraging to see financial confidence on the rise, our findings show that the right protection could further strengthen this sense of security.”
How Our Protection Experts Can Help
At Crystal Clear Financial Planning (CCFPL), we believe that financial resilience goes beyond savings and confidence, it’s about having the right protection in place.
Our team of expert Mortgage and Protection advisers don’t just help you find and secure the best mortgage deals, we also ensure that you and your loved ones are protected against the unexpected. From Income Protection to other tailored financial protection solutions, we will help find the right policy and cover for your needs.
Don’t leave your financial security to chance. Get in touch today for a protection review.
As with all insurance policies, conditions and exclusions will apply.
1 LV, 2025
