Two thirds (65%) of UK adults have no life insurance or other protection cover, more so in London (72%) and in core cities (70%).
Contrast this with motor insurance where 61% of adults have cover and 60% of UK adults have home contents insurance and its clear that where it’s not mandatory to have insurance, gaps appear.
These findings are revealed in the Financial Conduct Authority’s Financial Lives study, which comprises data from 13,000 consumer interviews, making it one of the most comprehensive studies of attitudes towards financial products available on the market.
of UK adults have no life insurance or other protection cover, according to the FCA’s Financial Lives Study
Location and age could explain why people in urban areas are less likely to have life insurance and critical illness cover. Protection policies are more likely to be taken out by people over 30 and under 85 and the average age of inhabitants is lower in London than elsewhere in the UK. Home ownership rates are also lower in urban areas and there’s a correlation between home ownership and buying protection.
According to the FCA, adults living in villages have higher levels of wealth and are more likely to use regulated financial advice.
Demographics aside, it’s logical to assume that people simply don’t understand the benefits of these vital insurance products, or believe they cannot afford them or in full knowledge of the facts and the ability to pay for a premium, just decide not to. The vast majority of the population has dependants, whether that is a partner or spouse, relatives they look after, or children.
Surprisingly, in the same study, 78% of adults ‘would rather be safe than sorry’ when it comes to their finances, which is at odds with their insurance purchasing habits.
of adults ‘would rather be safe than sorry’ when it comes to their finances
A lack of protection products could be indicative of a general apathy towards financial services product among the wider population.
Worryingly, it’s not just protection gaps that need to be bridged. 31% of adults have no private pension provision. With less money coming in at that stage, logically you would assume they’re even less likely to consider protection.