There are fewer people than ever without a savings cushion at all, while more people are taking out protection insurance for their families including life insurance (42% vs 36% six months ago), health insurance (15% vs 13% six months ago), critical illness cover (16% vs 11% six months ago) and income protection (10% vs 7% six months ago).
The rise in protection sales come as more families are juggling more household debt, which has soared, and now typically stands at £16,300 per household against £7,840 six months ago.
While family income has risen to £2,012 a month on average, up 4% in six months, families have seen a 3% increase in expenditure and are taking on more debt, while the spectre of interest rate rises, which would increase mortgage costs, is troubling more families.
Louise Colley, protection director, at Aviva, said:
“Our biannual Family Finances Report reveals that some families are feeling the dual pressures of debt and high housing costs, but hopefully some of these demands could be eased by rising incomes.
“It’s also encouraging to see more families are getting the message that it is important to protect your finances against sudden shocks – building up a savings cushion and taking out insurance. The Family Finances series has shown UK families to be a resilient and resourceful bunch, as finances have fluctuated over the years, so now it’s great to see that people are taking actions to make sure they’re prepared for whatever life has in store.”
