Warning over vulnerability of renters if illness strikes
Nearly six million UK renters could find themselves having trouble paying the rent if they or another key earner in their household became ill and was unable to bring in an income for a period of three months or more.
This was the finding of a survey by financial services provider Royal London, showing 5.8 million people would be in such a position.
It also revealed 48 per cent of those in this position have given no thought to how they would cope financially if they became too ill to work. The position is more acute for renters than homeowners, because 39 per cent of those who rent have no savings at all, compared with 23 per cent of the wider population.
Moreover, those who do have savings tend to have rather little, with 58 per cent having less than £2,000. By contrast, the average renter is in debt by £4,600 and nearly a third of those who work owe between £2,000 and £10,000.
As well as demonstrating a vulnerability to periods of worklessness, Royal London noted this showed how so many tenants are a very long way from being able to put together deposits to buy a home.
The company suggested that income protection policies could be a very wise thing for tenants to have in place to ensure their rent will always be paid.
Insurance specialist at Royal London Jennifer Gilchrist said: "Only three in ten renters would receive full pay if they were ill and less than one in ten have an insurance policy such as income protection that could provide a monthly income if they were ill.
"Just over a third of renters said they could afford to live for fewer than three months if they couldn’t work, so they really need to think about what their financial plan B would be."