Millions of people in the UK who rent their homes from private landlords are putting themselves and their families at risk of eviction and financial hardship due to lack of a financial back-up plan, according to research from Scottish Widows.
Despite almost a third (30%) of private renters admitting that they’d not be financially secure if their household lost its main income, less than a fifth (16%) have life cover in place and only 3% have critical illness insurance. This is regardless of the fact that more than half (56%) have children under the age of 16 who rely on them financially.
More than a third (35%) concede that if they or their partner were unable to work for six months or longer due to ill health or personal injury, they’d be unable to live on a single income. And when reviewing their finances, 35% pay little or no attention to insuring their rent. There is more than double the share of families in the private rented sector today than in 1992 and it’s increasingly likely that more homes will be let than sold in 2017, yet renters are at much higher financial risk than mortgage-holders, 50% of whom have life cover in place and 20% have critical illness insurance.
Johnny Timpson, Scottish Widows’ protection specialist, says: “Renters are not prompted by a house purchase to look at how they and their families would manage financially if they were to die or become seriously ill. But while they don’t have a mortgage to pay, they still have financial obligations, not least the monthly rent and regular household bills. Many renters assume they can rely on benefits, but welfare reform means that fewer of them would get their rent paid in full if their circumstances changed without warning.”
Arranging financial protection, in fact, is way down the list of renters’ priorities. One in eight (80%) view a mobile phone as essential yet only 28% think the same about providing security for their dependents in case they die, and just 21% think that providing security for their family should they become seriously ill is a necessity.
Just under a third (30%) of private renters say that they’d use savings to manage financially if their household lost its main income, yet a fifth (20%) have less than £1,000 put aside and 30% have no savings at all. Just under a quarter (36%) could only afford to pay household bills for a maximum of five months if they or their partner were unable to work, and 13% say they wouldn’t be able to pay anything at all.