Why now is the right time to invest in protection

Millions of Britons are bracing themselves for a winter of discontent as the cost-of-living crisis and soaring inflation pile pressure on already stretched household finances. Indeed, with some expected to face bills worth more than 90% of their disposable income by the end of this year1 and inflation running at a 40-year high of 9.4%; more than eight million UK adults2 are poised to make extremely difficult choices to ensure they can keep their heads above water. The reality is that many people have no savings to fall back on.

Reassessing daily expenses and outgoings will be necessary for most of us this year, but our research uncovered a concerning trend: just one in 20 UK adults (5%) planned to keep up payments to their private health insurance and income or individual protection policies3. That’s why initiatives like the Income Protection Task Force (IPTF)’s Income Protection Awareness Week (IPAW) – taking place this September – are so important, providing a vital opportunity to highlight the multiple benefits that comprehensive protection insurance can bring for individuals and their families.

As we all tighten our belts to cope with the worsening financial environment, it’s easy to forget that the crisis is taking a toll on our mental and physical health too. Our research found that more than two thirds of consumers (64%) said their financial situation made them feel stressed, anxious, or depressed whilst almost a third (30%) said they didn’t have anyone to turn to for advice when worried about money; despite the mental strain it caused them. The combination of worrying about having no disposable income and not having any savings can have a significant impact on mental health and an uneasy feeling of being extremely financially vulnerable.

We need to support and encourage people to review what solutions are out there, not just in the immediate future but also longer-term. Financial protection can be the safety net that – in cases such as illness, an accident, or time off work – can make a real difference to people. Our MortgageSafe policy for example can provide protection for mortgage repayments, a large monthly outgoing, so people have that reassurance around their finances. For a first-time buyer for example, taking on a mortgage can be daunting in itself, but having some protection in place can bring that excitement back into the experience, as well as provide the safety net they might really need in the future.

And as well as this, there are other ways protection policies can offer peace of mind to customers by delivering vital emotional support networks, that as our research shows, is often lacking. MetLife provide access to the Wellbeing Support Centre – which is available 24/7, every day of the year – as part of all our accident and illness policies. This gives our customers somewhere to turn to, to help minimise the risk of day-to-day challenges, but also to prevent short-term problems becoming longer term difficulties. And it’s open to advisers too.

Ultimately, it’s important that people plan today to help their future selves to feel, and become, financially resilient.

Rich Horner, Head of Individual Protection at MetLife UK

Sources:
1https://www.niesr.ac.uk/publications/measuring-effect-cost-living-crisis-low-income-households?type=uk-economic-outlook-box-analysis

2UK population as of mid-2020 was 67,081,234 with an adult population of 52,890,044. 16% of 52,890,044 is equivalent to 8,426,407.04 UK adults. For the purpose of the headline this figure is referred to as 8.4 million.

3MetLife UK commissioned Censuswide to survey 3,000 UK consumers, to understand their current and expected financial situation. The research was carried out between 24th and 27th March 2022.