Financial education is key to whether customers aged under 40 purchase protection insurance, according to findings from OneFamily Group.
The research conducted among 2,000 UK adults aged 18 to 40 found that 30% had life insurance, but this figure increased to 37% among those that had some form of financial education, compared to 27% of those that had none.
Similarly, 7% had income protection (IP) rising to 10% if financially educated, and 7% had critical illness (CI) rising to 9% if financially educated.
Of those surveyed, 36% indicated they have had financial education. This was through a variety of sources, including online courses, schools and universities, employers, government programmes or friends and family.
The most common source for financial education was from online resources, with 43% stating this route, followed by family and friends (36%), college or university (29%) and employers (20%). Only 18% said they had received financial education at primary or secondary school.
The data also revealed 41% of men said they had some form of financial education compared to just 32% of women. Those living with a partner were significantly more likely to have had financial education than those living alone – 41% compared to 29%.
Homeowners were also much more likely to have had financial education than renters – 44% compared to 30%.
There were clear regional differences. Almost half of those living in London had some kind of financial education (48%) which was almost double the percentage of those living in Scotland (25%).
The research also revealed that a third (34%) of respondents born after 1997 who received financial education said they had it at college or university, this compares to just a quarter of those polled born before 1997 (25%).
Ryan Griffin, protection director at OneFamily, said: “There are some stark differences when it comes to financial education, with nearly three in five 18 – 40-year-olds having had no financial education at all.
“What is clear however is the important role it plays in helping both Gen Z and Millennials understand the importance of protection, with a surge in numbers understanding the importance of critical illness, income protection and life insurance following some form of financial education.
“This is an important foundation to build on, and indications show Gen Z understands the importance of protection better than previous generations. However, there is still more to be done to turn awareness and understanding into action.
“With the recent news that children will also learn financial literacy from 2028 at primary school, there is a real opportunity here for younger generations to learn about both money management and protecting their futures earlier. This is essential to help people build confidence, resilience and the ability to make informed choices.”
‘Why was I not taught this in school?’
Roy McLoughlin, Plan Money consultant and Protection Distributors Group (PDG) board member commented: “Financial education is an important issue at the moment, and it is great the UK Government is planning to invest more into this
“The insight from OneFamily also really shows the direct link between being financially educated and understanding the importance of protection insurance across critical illness, income protection and life insurance.
“Something I have been seeing myself when I host surgeries with employers and employees is a desire to have learnt about budgeting, insurance, and wider financial literacy issues from a younger age. The question ‘why was I not taught this in school?’ is often asked.
“As the research highlights, there is a gap emerging around under protected generations because they have had no financial education. Hopefully however with the investment in financial education being planned, coupled with the demand for learning, we will see greater understanding and greater uptake of protection insurance over the coming years as well.”
