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Protection gap grows as only one in five UK workers have an IP policy

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  • 06/10/2022
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Protection gap grows as only one in five UK workers have an IP policy
According to new research, while four in ten are concerned about loss of earnings, the take-up of protection policies is still dangerously low.

The study Challenging Times: The health and financial fears of UK workers from insurance provider The Exeter said that, despite health and financial fears, working adults remain under-protected.

While 43 per cent of workers worry about a loss of income – rising to 47 per cent in London – only 17 per cent have or are in the process of applying for income protection policies, just 18 per cent have private health cover while 31 per cent have life insurance.

The research revealed that there is also an insurance education gap among UK workers.

Almost a fifth (18 per cent) of those surveyed said that they did not see the need for a protection product, eight per cent said that they did not know what the products were, and a further nine per cent said they would like to know more but did not know where to start.

 

Self-employed need to take cover

Take up of insurance among the self-employed was also low, with 46 per cent not having an income protection, health insurance, life cover or cash plan product in place.

This is despite self-employed workers having less of a safety net in the form of employer sick pay or employer-funded health insurance.

However, more self-employed adults in 2022 are concerned about a potential loss of earnings due to personal illness compared to 2019, before the pandemic (46 per cent compared to 34 cent). This corresponds with a rising level of income protection for this cohort, with 17 per cent of self-employed adults now having a protection policy, compared to only nine per cent in 2019.

Jamie Page, head of protection distribution at The Exeter, said: “The cost of an unexpected illness can have a profound impact on a person’s financial wellbeing. Above anything else, our Challenging Times report has highlighted how, regardless of age or region, workers in the UK are concerned for their health and financial future.

“With such a substantial proportion of people evidently worried about loss of income from illness, it’s up to insurance providers and advisers to make sure consumer education on protection products is reaching as wide an audience as possible and they are aware of the benefits of having a safety net over the monthly cost of paying an insurance premium.”

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