Over a third of British families lack financial safety net

Data from Legal & General looking at how prepared UK consumers are financially has revealed that 35 per cent of British families have no financial safety net to cope with a sudden loss of income. Almost two thirds of households (60 per cent) do not even expect to receive any financial support from family or friends, and nearly half (48 per cent) lack any form of protection insurance.
 
For those that do have a financial strategy, saving is the most common approach - 41 per cent of households identified this as their strategy. However, the average family has just £660 in savings, and higher living costs mean that this is an increasingly difficult option for many. The research is based on a survey of 2,478 consumers.
 
Other key findings:

50 per cent of 18-24 year olds have no financial safety net

Older respondents are better prepared and only 28 per cent have no strategy in place to deal with financial hardship

The average household expects just £155 in monthly support from friends and family - enough to cover just 10.9 per cent of essential spending

Only 12 per cent of households have an income protection insurance policy in place
 
Duncan Finch, Executive Managing Director, Legal & General Insurance, comments: "British families remain in a financially precarious situation despite signs of recovery in the UK economy. Daily financial pressures mean that many households are unable to put enough money aside as a safety net. Unfortunately 60 per cent of households are unable to rely on either family or friends for financial support and changes to the welfare system will reduce the ability of the state to assist in a financial catastrophe. Clearly there are some worrying gaps when it comes to UK consumers planning their personal finances."
 
Finch continues: Cutting back on saving and protection insurance may save money to meet bills in the short term but is not a good idea over the long-term. Encouragingly, our research shows that 31 per cent of households do indeed have critical illness or life insurance cover. However, it's crucial that those families without protection have a comprehensive financial strategy so they are well placed to deal with financial hardship."