Young renters are most financially vulnerable group
Two-thirds of 25-34 year olds don’t have enough in savings to cope for 90 days if they lost their income, according to LV=. And a third wouldn’t even have enough to cover the first month.
This ‘generation debt’ is therefore extremely vulnerable to financial shocks and has been named as the least financially resilient group in the UK.
More than two in five (44%) of these renters admit they aren’t confident in their ability to handle a personal financial crisis.
But despite this financial vulnerability, only one in 10 young renters have an income protection policy to fall back on if they lost their income.
The main reasons they gave for not considering income protection were that they think it would be too expensive (50%) or not trusting that it would pay out if they needed to make a claim (22%).
However, with cover available from £10 a month, according to LV=, and nine in 10 income protection claims paid last year, it wants to dispel these myths.
Justin Harper, head of policy for protection at LV=, said: “It’s worrying that so many 25-34 year olds have no idea how they would cope in a personal financial crisis, but those who rent are suffering even more.
“It’s clear that people in ‘Generation Debt’ are at risk of finding themselves struggling to make ends meet if they lost their income.
“With nearly half of older Millennials stuck in the cycle of renting, they’re missing out on the traditional touch-point of considering protection products when buying a home and as a result are more likely to have misconceptions about their real needs, advice and products.”