52 days to financial disaster

The majority of Britons are living on a financial tightrope with the average person having savings that would only last 52 days if they were unable to work, according to research from Yorkshire Building Society.

The Society's analysis shows that the average monthly outgoings are £1,445 while the average accessible savings are£2,474.

Shockingly, over a third (36%) would only be able to last 11 days, withless than £500 in accessible savings. The worst affected groups are women (46 days), divorcees (35 days), andthe 35-44s (39 days). These figurespaint an alarming picture as 17% of people think they or their partner may beunable to work for up to 6 months in the future due to illness.

Unrealistic Expectations

The majority (90%) of people have no personal income protection in place and if unable to work, 68% either do not know how they would survive or have unrealistic expectations of how they would continue to meet their daily expenditure.

Although one in five (21%) of respondents had no idea how they would cope if they were deemed unable to work, 19% said they would manage on state benefit allowances. However, as average weekly outgoings of respondents equalled £333.56, this leaves a weekly shortfall of£258.16, as the current state benefit stands at £75.40.

One in 20 (5%) think they would look into selling their home if they needed to accessmoney quickly. However, in a virtuallystagnant housing market with some consumers already contending with negativeequity, people cannot rely on being able to sell or rent their home in order torelease the equity.

Better to Die than Survive

Of those who do have some protection cover in place, the majority are focused on covering themselves in the event of death - with 47% of those with cover opting for life insurance over critical illness (17%) and income protection (10%).

The majority are therefore better prepared for their own death, than if they were unable to work due to illness. This shows that many have underestimated the burden that long-term sickness wouldhave on finances as well as the strain that would be placed on the rest of the family.

Tanya Jackson, Corporate Affairs Manager at Yorkshire Building Society commented: "In the current economic climate, this research paints an extremely alarming picture for those consumers without any protection products in place. Finances for many are already finely balanced due to the rising cost of living and the research reveals that both state benefits and savings are not viable options for the majority of consumers to rely upon for an adequate length of time.

"It is extremely worrying to see that many Britons are ‘living on the edge' and we therefore urge consumers to take a look at their protection needs in order to assess how they would cope financially if they were taken ill and whether they would benefit from the security that a protection scheme provides."