Women can’t rely on their employer to provide financial safety net
Nearly half (48%) of working women in the UK don’t have any form of protection policy in place according to the findings of Aegon’s ‘Protection Matters’ report. The report finds that just 10% of women with protection automatically receive this through their workplace, highlighting the need for women to seek out personal protection by speaking to a financial adviser.
Protection is important to women when looking at job roles. Over two in five (44%) women asked their current employer about its provision as a workplace benefit and nearly a third (32%) said it was a key decision-making factor. However, the importance women place on this doesn’t seem to be matched by employer provision, with many leaving women to take protection insurance into their own hands. In many ways this is understandable given the breadth of responsibilities employers have in areas like pensions. As a result it’s clear that advisers play a key role in encouraging take up of protection, with 15% of working women taking out protection insurance following a recommendation by a mortgage provider or financial adviser.
Despite this, a clear gap remains between women’s financial priorities and their levels of protection. Nearly half (46%) of women believe it’s solely their responsibility to financially support their family should the unexpected happen, and without the safety net protection provides, many would be forced to turn to their partner’s income, savings or government benefits. However, with over half (51%) of working women being the main breadwinner in the family, it’s likely that this would place significant pressure on their loved one’s income or savings.
Protection insurance can take away this financial worry. Policies such as life insurance, income protection and critical illness cover can provide vital financial support in times of need. This can help families to continue making mortgage or rent payments, and keep up with their day-to-day expenses, to maintain as ‘normal’ a life as possible while they focus on their recovery or coming to terms with the loss of a loved one. It could also protect people’s retirement saving for the future. One in four (24%) women view a workplace pension as the number one benefit an employer can offer, but time off due to serious illness can prevent pension payments being made. A protection policy can guard against falling behind on pension payments by replacing the income people use to make these contributions, helping to ensure retirement plans are not put at risk.
Stephen Crosbie, Protection Director, Aegon UK said: “The level of protection among working women is worryingly low and many of these women carry the sole responsibility to financially support their family in the event of unexpected illness or in the worst case, death. Yet, few are taking the steps to protect themselves and their loved ones. The number of employers automatically providing this safety net is surprisingly low and it is therefore vital that women across the country double check with their employers about protection insurance in the workplace and if there is no provision, take it into their own hands.
“Government initiatives such as auto-enrolment have successfully started to close the pensions gap in the UK, but currently there’s little being done to address the protection gap, which emphasises the importance of women taking responsibility for their own protection needs by seeking advice and getting a protection policy to suit their needs. Sorting out your own protection comes with some benefits. A personal protection policy is portable, it moves with you wherever you go − if you’re in work, between employers, or starting a new job, you’ll always be protected. It’s also more tailored than a workplace policy, enabling you to manage the costs, the level of protection and provider. With the help of an adviser you can ensure that you choose the protection cover to best suit your needs.”