Over half couldn’t maintain their lifestyle for more than a month if they lost their income

MANCHESTER, U.K. - Feb. 26, 2014 - PRLog -- 25/02/2014

According to a recent poll conducted by financialadvice.co.uk, over 50% of people would only be able to maintain their current lifestyle for up to one month if they lost their income.

The poll, which asked the general public how long they could maintain their current lifestyle if they were to lose their income, outlined the vulnerability of large sections of the population who rely heavily on their current income for short-term survival.

A recent poll by Barclays bank also found that 20% of families actually spend more than half of their monthly income on mortgage repayments alone; outlining the pressures modern families are facing just to make ends meet each month.

In fact, of all the respondents to the poll conducted by financialadvice.co.uk, only 15.8% claimed that they could maintain their current lifestyle for a period of six months or more.

Additionally, as certain families are paying more than half of their regular income on mortgage repayments, it’s likely that many would struggle even to pay their regular bills if they were to fall ill and not be able to continue working, something that could effect an entire family.

Alternative Solutions

There are alternative solutions for families and individuals to consider, which range from starting a savings account for an emergency fund, as well as several income protection plans with various providers.

Generally, income protection plans require you to pay a monthly premium, which depends on your individual circumstances such as current wage, age, general health and the level of cover you require.

Although some would argue that income protection is an additional expense that some families could not afford, it’s worth noting plans are typically cheaper than you might think, with some providers claiming to provide cover from around £5 a month, which is considerably less than a typical mobile phone contract.

A person who takes out an income protection policy would essentially become protected from a loss of income if they were to fall ill or have an accident and not be able to work anymore. This would mean that an individual or family could maintain their current lifestyle if they found themselves unable to work through sickness or an accident.

Dependant on the level of cover a person takes out, income protection plans can typically protect up to 70% of a persons income, with all benefits paid out generally being tax free. However, despite people’s general reliance on their income, recent studies have found that only 1 in 10 people have actually taken out an income protection policy, highlighting the risk that many families and individuals are taking.

Need advice?

Are you worried that you couldn’t survive or maintain you lifestyle if you were to become ill or have an accident and not be able to work? Contact one of our advisers online or by visiting financialadvice.co.uk or by calling 0800 092 1245 for expert advice.