Almost two-thirds (61%) of respondents do not have any form of income protection to replace lost income if they develop a serious injury or illness, according to research by Canada Life Group Insurance.
Its survey of 1,004 UK employees, also found that 44% of respondents who do not have income protection would rely on their savings to support them if they were to become seriously ill or injured. However, with respondents’ average savings totalling £8,849, the research found that respondents would run out of funds in approximately four months.
The research also found:
- 43% of respondents without income protection would apply for state benefits if they found themselves unable to work.
- 9% of respondents are not concerned about losing their income as they believe they could live off state benefits.
- 34% of respondents incorrectly thought that the benefit provided by the government if you are ill or disabled is over £200 a week, when it actually stands at £172 a week.
- 53% of respondents could not live off the Employment and Support Allowance (ESA) of £102.15 a week.
- 46% of respondents would not be able to meet mortgage or rental payments if they lost their income and had to rely on ESA.
Paul Avis (pictured), marketing director at Canada Life Group, said: “When it comes to serious illness or injury, many people assume it either won’t happen to them to they can rely on state benefits when their savings eventually run out. But being unable to work is more common than people think and our research underlines the fact that depending on savings or state benefits is a flawed plan for most employees.
“It makes sense for employers to offer group income protection as part of their benefits package. No employer wants to see their staff struggle if they are unable to work due to illness or injury, and showing employees they are protected and cared for acts as an effective retention and recruitment tool. Most group income protection products also come with rehabilitation services, ensuring employees get back to work as soon as possible, which is a bonus for both parties.”