Friday 20 May 2011

One in three households risk financial meltdown

A third of households would not be able to cope financially if they lost their main source of income, a survey has suggested.



Half of households with children rely on both parents' incomes
Around 44pc of households are reliant on two salaries, rising to 49pc among people with children and 51pc for those with a mortgage, according to life insurer Scottish Widows.
But a third of those questioned admitted they would not be able to manage if the main breadwinner in their household lost their job, with only 26pc of people claiming they would be financially secure in the long term.
Despite this only 7pc of consumers have an income protection policy and just 12pc have critical illness cover.
Instead 23pc of people said they would cut back on their spending if one earner lost their income.
But Scottish Widows pointed out that cutting back on general expenditure was only likely to lead to small savings, as people would still have to pay all their essential bills such as the mortgage, utility bills and council tax.

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Clive Allison, market director of protection at Scottish Widows, said: "Despite the number of households in the UK stating they could not cope financially if the main breadwinner was to lose their income, the take-up of protection products remains alarmingly low.
"Many millions of people are not protecting themselves in the unfortunate event of illness, an accident or death of the main breadwinner, which is leaving them vulnerable and in many cases unable to afford to support their families."

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