Less than half of workers who are worried about potential lost income following personal illness or injury are doing anything about it by applying for income protection (IP), according to research from The Exeter.
The findings show while 43% of working age adults are worried about the potential loss of income resulting from a personal illness or injury, just 17% have or are in the process of applying for income protection policies that can help them manage the financial impact of these events.
Nearly a fifth (18%) of respondents said they did not see the need for insurance products such as IP or life insurance, 8% said they did not know what the products were, and a further 9% said they would like to know more but did not know where to start.
The insurer’s Challenging Times: The health and financial fears of UK workers report surveyed 2,000 employed adults aged over 18 and 2,000 self-employed adults aged over 18 in the UK.
Londoners most concerned about loss of income due to ill health
Compared to the national average, the findings show workers in London were most concerned about a loss of personal income due to illness or injury, with 47% of those surveyed reporting this worry against the national average of 43%.
However, by region, London also reported the second highest level of workers with IP covers at 26%, 9% above the national average.
Londoners were the least concerned about the cost of products – of those based in the capital without IP only 47% said this was due to the affordability of insurance products, the lowest rate for any region of the UK.
Self-employed workers still exposed
The proportion of self-employed adults with any form of insurance in 2022, including an income protection, health insurance, life cover or a cash plan product, was only slightly lower at 46% than the UK average of 48%.
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, self-employed adults were far more concerned about a potential loss of earnings due to personal illness compared to before the pandemic in 2019 with 46% saying so compared to 34% three years ago.
This correlates with a rising level of income protection for this demographic, with 17% of self-employed adults now having a policy, compared to only 9% in 2019.
Jamie Page, head of protection distribution at The Exeter, (pictured) 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.”