Are Britain's uninsured mums putting household finances at risk?

A third (33%) of women with dependent children admit they could only pay three months of household bills if they or their partner lost their income due to unforeseen circumstances, and 10% think they wouldn’t be able to pay them at all. Yet the majority have no critical illness or life cover, potentially putting their family’s financial security in danger.

Scottish Widows’ latest protection research reveals that 29% of British mums admit their household would be placed at financial risk if they lost their income due to unforeseen circumstances. One in five (20%) claim they could only pay their mortgage for a maximum of three months, while one in three (33%) say they would have to use their savings to pay for such adverse circumstances.

The research has found that despite having such serious money concerns, women with children don’t feel they can do anything to allay the situation. Just 39% of mums have taken out a life insurance policy, and alarmingly, fewer than one in ten (9%) have critical illness cover.

Existing financial pressures have caused women to deprioritise life and critical illness cover. Almost half (47%) don’t think they can afford life insurance, and a further 39% admit they can’t afford critical illness cover. 28% say they have resorted to selling items online and 30% say they have avoided turning the heating on in winter in order to save money, showing the demands put on their finances already.

Many mothers still don’t consider having insurance a necessity, with 15% saying they don’t rate having critical illness cover as a financial priority and 13% thinking it’s a waste of money. This is despite the fact that more than a third (35%) of women earn the same or more than their spouse. More than one in ten (13%) women with children think they don’t need cover, which suggests some women primarily responsible for childcare could be underestimating the potential impact of them becoming critically ill. With seven in ten (68%) women primarily responsible for childcare, families could be faced with unexpected childcare costs if those frequently looking after children suddenly become unable to do so.

In the event that they or their partner dies, more than a third (36%) of women with dependent children also think they could rely on state benefits to support their family. However, with more than two thirds (69%) unsure of how much the surviving partner would get from the state, many could be risking the financial stability of their family, particularly in light of upcoming changes to bereavement benefits, including the Widowed Parent’s Allowance[1], which may result in a significant reduction in the period over which support will be available.  

Sarah Moore, Senior Protection Proposition Manager at Scottish Widows, commented, “It’s concerning to see such a high proportion of women having to take a gamble with their household’s financial security because of other money pressures, particularly given so many families have little in the way of backup funds.

“If the choice is between protection insurance or putting the heating on, it’s obvious which one a parent would choose. But even a tiny amount of protection is better than none – after all, the household would struggle to run at all without mum (or dad). As an industry we need to find better ways to show the critical role which protection insurance plays in safeguarding the financial welfare of our families.

“With a new Bereavement Support Payment system in place from April next year, it’s more important than ever for women to review their financial protection needs and seek advice to make sure their household is covered.”