The number of days the average UK household could survive financially if the main breadwinner’s income is lost through long-term sickness, critical illness or death before being totally reliant on state benefits, friends or family is just 29 days, according to new research just published.
The research, carried out by Legal & General and supported by analysis from the Centre for Economics and Business Research (Cebr), showed that for average working age families, the figure dropped to just 14 days.
“The data shows how critical it is to have the right mortgage protection insurance in place,” according to Kathryn Tomlinson of Cailean Mortgages.
“The research shows that the perception among most households is that they could survive financially for more than double that time - 77 days, but the reality is that most families would hit the breadline long before that,” she added.
Regional variations show that households in Wales could only survive financially for just 7 days if the main breadwinner’s income is lost, whereas in London, that figure is 83 days. In Scotland the figure is 17 days, the North East of England 16 days, the north west of England 24 days, the East Midlands 31 days, West Midlands 30 days, the South West, 27 days and the South East 41 days.
A one per cent rise in interest rates would mean households would no longer be able to save each month and would have to change their spending habits, or rely on existing savings, to make ends meet. A two per cent rise would move the typical household with a mortgage one day closer to the breadline.
“This research shows that It's more important than ever to have the right mortgage protection policy in place,” adds Kathryn Tomlinson.
“There are a number of mortgage protection policy options, so it’s important to seek independent advice.”
“At Cailean, our mortgage advisers will work with you to understand your specific requirements before searching the whole market for the most suitable mortgage and mortgage protection insurance for you.”
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