Accidents and illness to kill savings
Two fifths (40%) of Brits would rely on savings if they had an accident, yet many Brits don't have enough savings to see them through a single month with no income.
Mintel's research reveals more than one in five (22%) Brits claim to have no savings, one in ten (10%) less than £500 - and just under half (45%) have £2,000 or less.
Savings at riskThe research also highlights the top five ways the nation would finance a period of time out of work in the event of the main income earner being unable to work due to illness or accident for an extended period, these are:
- Savings (40%)
- State/benefits (30%)
- Family/friends (24%)
- Employer (12%)
- Insurance cover (7% think they have insurance to protect them and 4% are definite they have insurance cover which would pay out in these circumstances).
Stephanie Absolom, senior financial service analyst said: "Some 30% of consumers believe that they would rely on the state for financial support if the main income earner in their home was unable to work as a result of an accident or illness.
"The recent upheaval in the welfare system may encourage consumers to reassess the extent to which they can rely on the state. It may also force some to take greater personal financial responsibility."
No trust in insuranceToday, just 3% of people own traditional income protection and just over a fifth (22%) own some type of income protection product –perhaps an accident policy.
Despite lack of provision for a prolonged period of absence due to sickness or accident, Mintel's research shows that 34% of consumers would not consider purchasing income protection under any circumstance and that 20% of people who currently don't own it have never considered why this is.
Some 42% of those without cover say that they don't own income protection because they can't afford it, meanwhile, some 19% of people would be more inclined to purchase income protection insurance if they could be given a premium discount reflecting their healthy living.
Unclear and unfair"Consumers lack a thorough understanding of what income protection products offer, which is hampering growth in the market. Insurers need to simplify their product and work together in order to identify ways of educating people about income protection.
"They also need to rebuild trust that has been damaged as a result of the PPI scandal and a lack of transparency," adds Absolom.
Mintel's research revealed two thirds (66%) of those in work expressed concern about not being able to work due to health reasons, compared to just over a third (33%) who claimed no concerns whatsoever about finding themselves unable to work due to an accident, illness or serious health condition.