The research which polled 2,070 British adults revealed that since July 2013 a total of £32,151,136,651 has been built up in unpaid mortgages where those left behind were unable to cope with the financial burden that accompanied the loss of a partner or loved one. Legal & General estimates that around 1.45m people in the UK have suddenly lost someone who contributed to the household finances, with almost half of that group (47%) having had a mortgage left to pay when the tragedy occurred.
For individual households where the main breadwinner has been unable to work due to illness or death, the average outstanding mortgage was found to be £61,539. Legal & General Mortgage Club feels the industry needs to work together to ensure that borrowers truly understand their financial obligations and the options available to them when it comes to protecting themselves financially
Jeremy Duncombe, Director, Legal & General Mortgage Club said:
"These figures highlight the worrying number of borrowers out there who have been sold a mortgage without adequate protection cover. Tangible objects, such as pets and home contents, are often perceived as much more straightforward to insure, meaning that mortgages are sometimes left out of the equation.
Duncombe continues:
“Of course, there are benefits to advisers when it comes to taking out protection as well. With the market rebounding, there is an opportunity not only to secure more mortgages, but also to sell more protection products. More than that, however, it is vital that advisers make people aware of the risks they are taking if they have no protection, as they could very quickly find themselves in a situation where they are unable to meet their repayments. For most people, taking out a mortgage will be the biggest financial commitment of their lives, yet many are still leaving their adviser’s office without having a back up plan in place should the worst happen.”
