How would you cope if you couldn’t work?
A third of people say they wouldn’t be able to recover quickly from an unexpected financial shock or loss of income, a new report reveals. TRICIA PHILLIPS reports
ALMOST a quarter of us have no savings to fall back on, and nine out of 10 don’t have an income protection insurance policy.
However, two in five people have their mobile phone covered in case of loss or damage, according to research from insurance firm Zurich.
The report reveals that to feel more financially secure, two in five people would like to have some savings, while a quarter said not having any debt is their goal.
A third of people said earning £1,000 to £2,000 a month would help them to feel more financially resilient, while one in five said it would need to be £2,000 to £4,000.
Figures from the Office for National Statistics show that the average net individual income is £1,278, which leaves many people short on their desired earnings and at risk of struggling should they be faced with a large unexpected bill or loss of income.
There are some misconceptions around products such as income protection – most commonly that it’s too expensive.
A typical 35-year-old professional earning an average salary of £27,000 can protect 50% of their net income for around £9 a month – that’s less than a coffee at £2.50 a pop per week.
They could get a payout for up to two years if they were unable to work due to illness or injury.
Rose St Louis from Zurich said: “The most valuable asset we have is ourselves and our ability to generate an income.
“Therefore it is a concern that nine in 10 people are likely to prioritise insuring their mobile phone over themselves.”