More Than Half Think Income Protection is ‘Unimportant’

More than half of people do not think income protection is important, a new survey suggests. 

A further 12 per cent don’t understand the value of an income protection policy, according to research from Shepherds Friendly. 

This is despite finding fewer than a third of people could rely on their savings if they lost all sources of income, suggesting the vast majority would benefit from a policy paying out a regular sum if they were no longer able to work due to illness or injury. 

Some four in ten could afford their current lifestyle for up to three months, and 12 per cent would only be able to last a month. Families are even less likely to have a savings buffer, with just 19 per cent of households with children saying they could rely on the money they’ve saved. Some 18 per cent say their finances would last them no more than a month. 

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Shepherds Friendly chief executive Ann-Marie O’Dea says: “The consequences of Covid-19 mean it’s never been more essential for people to understand the importance of protecting their income. “Our research findings are concerning not only because they reveal that many people are walking a tightrope when it comes to their savings, but also because they show the extent to which people don’t realise how income protection can provide support through the type of challenging situation we’re all finding ourselves in now.” 

A fifth of people think they can rely on the government if they lost income, whereas  just 2 per cent thought the same about income protection.