The What Really Matters report from Aegon UK suggests women aged 25 and over, and mothers of under 18 year olds in particular, are failing to protect the things that are most important to them.
Around 71% of mothers view the financial security of their children as among the top priorities in their life, yet 49% have never had the difficult conversation about what would happen in the event of their death with their next of kin.
This is despite the fact that 67% of women, and 72% of mothers, now work to support their families, according to data from the Office for National Statistics (ONS) and are underestimating their financial importance to the family unit.
Aegon’s research suggests that nearly three in five women aged 25 and over don’t have any form of protection cover.
In the event of a serious illness or accident, almost one in three working women surveyed said they would need to rely heavily on State support if they were unable to work for six months.
Aegon’s research found that 55% have no idea how little the State pays out, with one in four believing it was more than the current level of £87.55 a week for 28 weeks, while a further 30% admitted they just didn’t know.
In reality, against what the ONS has calculated is a woman’s average annual income of £23,589, a mother would face an annual pre-tax shortfall of £21,137.50 if they were to rely on State support alone.
Two in five working women, or just over one in three mums, claimed they would rely on savings to weather the financial storm if they were unable to work for six months.
However, nearly one in three mums with young children admits to having absolutely no savings whatsoever.
The vast majority – 70% – said financially they would not last six months if something disrupted their regular income, and only 13% said they have enough money saved away to survive for more than a year.
Aegon protection director Dougy Grant said advisers are crucial in addressing the issue of under-protected mothers.
“These report findings are concerning. Women are key to running most households, yet despite this they aren’t taking the necessary steps or having the difficult discussions to put the necessary protection plans in place in case something should happen to them.”
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“Whether it’s a reluctance to discuss the unimaginable, a feeling that protection isn’t affordable, or simply a lack of awareness about the services on offer, there are plenty of reasons why women aren’t insuring themselves for the benefit of their family. There’s a clear disconnect between the peace of mind of protecting our most pressing priorities and our behaviour as a consumer.
“The adviser is pivotal in addressing this disconnect and helping translate these priorities into the most appropriate actions for the customer. Key life stages such as marriage, having children, buying a house, getting divorced are all trigger points for a review of protection needs with any customer.”
SavvyWoman.co.uk editor Sarah Pennells said she was shocked by the findings in the report.
“While women are increasingly in charge of family finances, they are falling behind when it comes to thinking about what would happen to their finances if they could not work or couldn’t take care of their children.
“I was struck by the fact that almost three quarters of mums say that the financial security of their children is a top priority, but one in three has no savings and four out of ten have no protection insurance.
“Aegon’s report shows that half of mums with children under 18 haven’t talked about their death with their closest family. This type of conversation is never going to be easy, but talking about it and putting plans in place will ultimately make things a little easier for your family, should the worst happen. It’s too important for us to ignore.”