Over four million renters at risk of losing home
UK renters are potentially risking homelessness by failing to have a financial safety net in place, said Scottish Widows.
More than a third (38%) of private renters admit that they’d not be financially secure if their household lost its main income.
And nearly four in 10 (39%) – amounting to 4.14 million people – say that if they fell seriously ill and were unable to pay their rent, they would have no idea where they would go or could be left homeless.
Yet only 4% of private renters have critical illness cover and 22% have life insurance, leaving them at risk of eviction and financial hardship due to lack of a back-up plan if the unexpected were to happen.
More than half (51%) of renters worry about unexpectedly being unable to pay rent, said Scottish Widows.
However, almost a quarter (24%) admit they’ve never thought about what they’d do if they became ill and couldn’t afford the rent. And of those who have thought about it, over two fifths (44%) say they’d have to ask their parents to cover their payments, and two-fifths (41%) would have to move back into the parental home.
Renters are also failing to insure against common mishaps, such as theft, fire or flood. Only 32% of private renters say they pay attention to insuring their home contents against these eventualities, and just 10% of renters say they have home insurance that covers both their property and contents.
Out of work
When asked about how they’d cope should they or their partner not be able to work for six months, a third (33%) of renters say they’d dip into their savings, and almost as many (31%) say they’d rely on state benefits.
But although many renters assume they can rely on benefits, in fact working-age welfare reforms mean that fewer of them would get their rent paid in full if their circumstances changed without warning.
Johnny Timpson, protection specialist at Scottish Widows, said: “It’s important for people living in rental accommodation to understand the risks of signing a tenancy contract without any financial back-up in place, particularly if they don’t have much in the way of savings.
“Our research demonstrates how critical it is to think ahead, and while no-one wants to think about the worst happening, having a safety net in place will provide peace of mind about avoiding eviction and being able to keep up with regular outgoings such as household bills.”