More than half (56 per cent) of private renters have no form of financial protection in place despite a third needing to take extended time off work, research from Scottish Widows has revealed.
The research, which surveyed more than 4,000 UK adults, showed that the average period that people have taken off due to serious illness or injury is almost five months.
This is despite separate research from Scottish Widows finding 9 per cent of people could last just one month in financially supporting themselves and their households if they were not able to work for an extended period.
Scottish Widows protection director, Rose St Louis, said: “Millions of renters are financially vulnerable, and this shouldn’t be ignored.
“Rising rents are taking up a higher proportion of people’s income, the cost of living squeeze hasn’t gone away and, for many, financial pressures aren’t easing.
“Buying an insurance policy against serious illness or loss of income isn’t just for those who have children or have opted to buy a home and take out a mortgage.
“It’s for everyone to help ensure financial security, meet outgoings, and keep a roof over their heads at any stage of life.”
Scottish Widows also warned the impact of unexpected periods of time off work can be “easily underestimated”.
Figures from the Financial Conduct Authority showed a third of renters have seen rent payments increase in the short term.
Absence due to injury or illness can lead to a loss of earnings, thereby hitting renters’ ability to make payments, as well as their wider financial security.
Awareness
The research also found, when looking at why the levels of financial protection are low amongst UK renters, there is a clear awareness gap.
Almost a third (32 per cent) have never thought about it before and 20 per cent believe they have no reason to have protection in place.
Another barrier identified by Scottish Widows was cost, with 16 per cent of respondents assuming protection would be out of their budget.
Protection insurance is most typically taken out when buying a property, but the insurer cautioned that, with the average age of a first-time buyer rising and currently standing at 34, people are opting to rent for longer and it's “vital” to do more to support this cohort.
Additionally, among the 44 per cent of renters across the UK who do have protection insurance in place, a fifth said they took it out because they have children.
Meanwhile, 15 per cent explained they were prompted to take out insurance because someone close to them needed it, and they saw the benefit.
tom.dunstan@ft.com
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