One in eight (13%) adults in the UK have reported they would need to sell their family home if they lost their income, with 53% of them having no financial provision in case that were to happen, according to the Cost of Resilience report from Zurich UK.
Over two in five UK adults have been out of work for up to a year, and for 10% of them it has been longer than 12 months. It is estimated that 131 million working days were lost due to sickness or injury in the UK last year.
Despite the level of unemployment falling, recent statistics from the Office for National Statistics (ONS) revealed that 1.36 million adults remained without work in July, and this figure does not account for people who are temporarily off due to sickness or injury, meaning that, in reality, the figure could be much higher.
The report found that over a third (34%) do not feel financially resilient and do not have the ability to manage a financial shock or unexpected loss of income on their own. As a result, one in eight (13%) would have to sell their family home if they lost their income because of sickness or injury. While more than a quarter (26%) would have to sell possessions, and one in seven (14%) would have to find a cheaper place to rent.
Furthermore, the study also found that, despite half of adults experiencing unexpected leave from work, nine in ten (92%) don’t have Income protection cover, a financial product that shields your pay against being unable to work because of illness or injury. One in six (17%) have no disposable income and a quarter (24%) have no savings to fall back on.
Commenting on the findings, Zurich UK head of strategic partnerships Rose St Louis said: “It’s concerning that so many people have experienced unexpected time out of work, yet have no safety net in place for this potentially happening again. Even more shocking is the number who would have to resort to selling their home, as this action could have a significant impact on the whole family.
“Lack of savings and planning the family finances is putting millions of adults at risk of not being financially resilient, but not taking action could make the situation far worse. Putting the ‘it won’t happen to me’ view to one side, it’s vital that people review their circumstances, to see what support exists to protect their finances and lifestyle.”
Additionally, neuroscientist Dr. Jack Lewis stated: “The findings demonstrate the very real impact that a period of being unable to work can have. We have a tendency to prefer items that we can enjoy immediately over and above valuable things that we have to wait for, even when the latter adds greater value to our lives overall.
“A financial product that pays your salary when you are too ill to work is a strange and perhaps counter-intuitive concept. So, we need to educate people to help them understand that such support exists; products that ease the stress and anxiety stemming from the threat of an unanticipated loss of income.”
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