Ignorance Is Not Bliss, As 24 Million People In The UK Face A Rude Awakening As They Run The Risk Of Financial Meltdown
02 Mar 10

A surprising insight into British financial behaviour is revealed in new research commissioned by Friends Provident. The Protection Oversight research undertaken on behalf of Friends Provident by 72 Point revealed that nearly half (24 million) of people in the UK have no insurance in place to cover loss of income through illness or death of a breadwinner.

Even those that have considered taking some action would be underinsured by an average of ?14,500 per year.

Alarmingly, a third of people think they could live on less than 35% of their take home pay if they were unable to work through illness or injury. Based on an average weekly income of ?489, that means they would have a maximum income of ?171 per week, a massive ?300 less than the current average weekly household expenditure of ?471, and not enough to survive on especially if there is only one breadwinner in the household.

Of those who have policies in place, over half (53%) have no idea how much they would receive if they were to make a claim. This suggests the policies they have may no longer be adequate if their circumstances have changed, for example, their salary has increased, they have married or had children since taking out the policy.

Ed Stuart-Brown, head of protection sales commenting on the Protection Oversight research said:

"The findings in the Protection Oversight research are very worrying. Imagine being told that you had just been given a 66% cut in your income - the impact of that for most people would be catastrophic. It?s time people took control of their future and looked at this in a responsible way, instead of burying their heads in the sand, especially in today?s environment. Ignorance is not bliss, it?s irresponsible. The shortfall in protection of ?14,500 per year shows there is a huge opportunity for both advisers and insurers to educate people."

"It?s a sad fact of life that the unthinkable can and does happen and the last thing you would want is to leave yourself or your family in dire financial straits. I would also urge those who do have cover to dig out their policies and review their level of cover to ensure they have made adequate provisions should the unexpected happen. Unfortunately it?s too late to do anything about it once illness, accident or death occurs. If you are fit and well now is the time to act; the cost for most people is a fraction of the potential benefits they could receive and it?s a simple matter to review your needs with your adviser."

The research:
The Protection Oversight research was commissioned by Friends Provident and was undertaken by OnePoll. An online survey was conducted by 72 Point in December 2009 and surveyed 2,000 adults across the UK.

About Friends Provident:
Friends Provident was originally founded in 1832 to alleviate the hardship of Quaker families facing misfortune. Friends Provident's strategy today is to operate in markets where it can deploy its award-winning strengths in technology and service to gain competitive advantage. Since its demutualisation in 2001, Friends Provident has developed strong offerings in pensions and protection to complement its historic With Profits business, and now prioritises international growth. Friends Provident is fully committed to the principles of the FSA initiative ?Treating Customers Fairly?.

About Friends Provident Protection Business:
Friends Provident has been writing term assurance since the company?s foundation in 1832 and income protection business since 1882.

Our award winning eSelect system offers online underwriting for term assurance, critical illness, income protection and waiver of premium, capable of accepting on ordinary rates or with special terms. The majority of Friends Provident?s new protection business is transacted online. This process allows end-to-end online electronic processing and account servicing ranging from new business quotations to new business tracking.