35% of British families have no financial safety net to cope with a sudden loss of income, according to data from Legal & General.
The research, based on a survey of 2,478 consumers, found that 60% of households do not even expect to receive any financial support from family or friends, and 48% lack any form of protection insurance.
For those that do have a financial strategy, saving is the most common approach – 41% of households identified this as their strategy. However, the average family has just £660 in savings.
50% of 18-24 year olds have no financial safety net while older respondents are better prepared and only 28% have no strategy in place to deal with financial hardship.
Meanwhile, only 12% of households have an income protection insurance policy in place.
Duncan Finch, executive managing director for Legal & General Insurance, said: “British families remain in a financially precarious situation despite signs of recovery in the UK economy. Daily financial pressures mean that many households are unable to put enough money aside as a safety net.
“Unfortunately 60% of households are unable to rely on either family or friends for financial support and changes to the welfare system will reduce the ability of the state to assist in a financial catastrophe. Clearly there are some worrying gaps when it comes to UK consumers planning their personal finances.”
He added: “Cutting back on saving and protection insurance may save money to meet bills in the short term but is not a good idea over the long-term. Encouragingly, our research shows that 31% of households do indeed have critical illness or life insurance cover.
“However, it’s crucial that those families without protection have a comprehensive financial strategy so they are well placed to deal with financial hardship.”
