Just 7% of people have income protection, AMI report reveals

Only 7% of people currently have an income protection product in place, a new report from the Association of Mortgage Intermediaries (AMI) has revealed.

Research revealed that this figure doubles to 14% for those aged between 18 and 34.

The AMI suggested that having income protection in place is considerably more important to younger people, and suggested there is a generational shift in the consumer mindset about the value of protection.

The Association’s report, Protection: Moving forward, asked 5,000 consumers and 253 independent financial advisers a range of detailed questions about the protection market.

It found that 18 to 34 year olds are significantly more likely to consider income protection as a result of COVID-19 than any other age group. Two in five (40%) who do not have income protection said the pandemic has made them more likely to consider putting a policy in place, while in comparison, one in five (19%) of those aged between 35 and 55 – and just 4% over-55s – said COVID-19 had impacted the likelihood of them getting income protection.

Overall, the AMI found that 52% of people think having income protection is important, falling to 41% of over-55s. Among 18 to 34 year olds, however, 65% said that income protection is important, which the Association suggested means for younger people, the connect between protecting the home, and protecting the income that is keeping that home, is potentially “much clearer”.

AMI chair, Andrew Montlake, said: “This report offers some really interesting insight into how views about the importance and value of protection differ considerably between the generations, with younger people much more likely to consider protection – particularly income protection – than older age groups.

“I think the key thing to draw from this is that, as an industry, we must not shy away from the protection discussion. Not only do we have a duty of care to our clients to ensure they are educated on the benefits of these products but that actually, our clients want to know more and are more inclined to protect themselves than we may think.”

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