Less than one in ten workers have income protection

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There are around 27 million people in employment in Britain, but only 2.5 million, less than 10%, have income protection, says an October 2016 article from MortgageFinanceGazette.com

If people without protection lose their job through sickness, injury or redundancy, they will struggle to pay the household bills, including their mortgage.

One of the reasons that people do not take out income protection is that it is mistakenly seen as similar to payment protection insurance, which has a bad reputation.

Personal borrowing levels are high. In June, the Council of Mortgage Lenders said that mortgage borrowing was over £20.7bn, which is the highest amount for eight years. With interest rates at low levels, this amount could increase in the next year.

Barclaycard has recorded increased levels of consumer spending, much of which is done through borrowing on a credit card. According to the MortgageFinanceGazette.com article, the Office of Budget Responsibility has predicted that the average household debt will reach £24,000 by 2020. This debt will be from mortgages, personal loans and credit cards.

A survey by One Poll found that the average person can last 96 days on their savings, but 70% of people have no plans in the event that they lose their job.

Many people do not want to think about the uncertainty of the job market and what they would do if out of work. Rather than avoiding the issue, it is better to consider taking out income protection insurance so that the mortgage and other debts can still be repaid if the household income decreases.

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