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A lack of financial back-up planning puts renters at risk

an image of a basket of eggs with one golden egg in
16 February 2017

By UKinsuranceNET In News

New research from Scottish Widows suggests that people living in privately rented homes are putting themselves and their families at risk of eviction and financial hardship due to lack of a financial back-up plan.

The study revealed:

  • that only 16% of private renters have life cover;
  • just 3% have critical illness insurance.

This is compared to mortgage-holders, with 50% having life cover and 20% having critical illness insurance in place.

The survey also found that:

  • 30% of private renters admit they would not be financially secure if their household lost its main income;
  • 35% say that if they or their partner were unable to work for six months or more due to ill-health or personal injury, they wouldn’t be able to manage on a single income;
  • 35% pay little or no attention to insuring their rent.

Financial protection isn’t a renter’s priority

The data also suggests that some renters don’t consider financial protection a priority, with 80% saying a mobile phone is essential yet just one in five (21%) saying security for their family should they become seriously ill is a necessity.

30% said they would use savings to cope financially if their household lost its main income, yet a fifth (20%) have less than £1,000 put aside and 30% have no savings at all.

This is despite more than half (56%) of the private renters questioned having children under the age of 16 who rely on them financially.

A spokesman from Scottish Widows said: “Many renters assume they can rely on benefits, but welfare reform means that fewer of them would get their rent paid in full if their circumstances changed without warning. Having a financial plan in place will help protect their living arrangements in this type of eventuality and give greater peace of mind about avoiding eviction and being able to keep up with their regular outgoings”.

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