Research from Scottish Widows has drawn attention to the lack of financial preparation in place for UK households. Inspired by Lung Cancer Awareness Month and Pancreatic Cancer Awareness Day, the statistics show that very few UK adults have adequate protection, savings or insurance in place. This means that they would struggle to cover the household costs if an income was lost due to serious illness.
Cancer awareness days
November marks Lung Cancer Awareness Month. According to Macmillan, the number of men developing lung cancer is decreasing, whilst the number of women being diagnosed is increasing.
Currently, 53% of new cases are men and 47% women. The average age of diagnosis for both men and women is 55.
November 16th signalled Pancreatic Cancer Awareness Day. Pancreatic cancer cases are split evenly between men and women and the average age of diagnosis is 51.
There are 130 new cases of lung cancer and 26 pancreatic cancer diagnoses every day. Those are just two of a wide range of illnesses that anyone can be diagnosed with, so imagine how many people are diagnosed with other types of cancer, illnesses or disabilities each day. More needs to be done to ensure that household costs are covered, should the unexpected become reality.
Lack of preparation
UK adults are failing to create a financial safety net which would cover household costs if the main earner was unable to work for six months. When asked how long their current savings would cover household costs in this situation:
- 21% said that the financial security of their home would take an immediate hit
- 47% said that their savings would provide for their household for less than six months
This shows that many UK earners are vastly under-prepared and that almost three quarters of families could be at risk of financial crisis, should a main earner be forced out of work due to illness.
Unreliable back-up plans
A quarter (24%) of respondents said that they would rely on state benefits to cover household costs, should one of the main earners cease to bring in an income. Of course, some government assistance might be available, but it is not guaranteed, and claims can take weeks or even months to be accepted. With no savings or alternative plan in place, that could leave households in debt and facing big financial problems, on top of the emotional toll of a seriously ill family member.
40% responded that they would use savings to cover the cost of household bills and expenses, should the worst happen. Whilst it is important to have a safety net in place just in case, it is worth noting that illnesses bring their own costs. Whilst many treatments are available on the NHS, additional equipment and home-care costs need to be accounted for, when planning and building an emergency fund.
Insurance can help
According to the research, less than half of UK adults have invested in insurance to protect their family in the event of lost income; less than a tenth (8%) have Critical Illness Cover, whilst only a third (34%) have Life Cover in place.
These protective insurances can provide an income, or lump sum to cover the cost of bills, living, medical equipment and care in the event of a serious diagnosis. It is worth looking at a range of products to see which is suited to the needs of you and your family, and to make sure that you will be accepted on to the policy.
To discuss building an emergency fund and to find the right insurance products for you and your family, please do not hesitate to contact us on 0800 612 8099 or request a call back by clicking here.