Bricks But No Backup

Millions of UK mortgage holders could be left vulnerable and at risk of financial difficulty, with no income protection in place to help them keep up with their mortgage payments if they were to suddenly experience a loss of income.

New research from LifeSearch and HomeOwners Alliance reveals that over a third (36%) of homeowners with a mortgage have no life insurance, income protection, or critical illness cover in place - equating to approximately 2.34 million individuals.

Furthermore, almost half (46%) of mortgage holders said they would struggle to meet their payments within six months of losing their income due to illness or injury. One in five (21%) would face financial difficulties within just two months.

Without adequate cover, many mortgage holders said they would need to take decisive action to stay afloat. While some would reduce non-essential spending (29%) or request a mortgage payment holiday (26%), others would borrow from family or friends (19%), sell valuables (19%), or rely on Government support such as Universal Credit (15%).

Additionally, nearly one in five (19%) would reduce their pension or savings contributions, which could affect their long-term financial security.

Despite over two-thirds (67%) of respondents having spoken to someone - such as a bank, mortgage adviser or family member —about protection insurance when taking out their mortgage, only 16% currently have income protection in place. This gap between intention and action means many households may be unprepared for unexpected financial challenges, leaving them vulnerable to financial shock.

Debbie Kennedy, CEO of LifeSearch said: "These findings highlight a worrying gap between intention and action. While many mortgage holders have spoken to someone about protection, far fewer have actually taken steps to put cover in place, leaving themselves, and their homes, vulnerable to life’s unexpected events. Protection isn’t just a financial product, it’s a safety net, a plan for the unexpected, and for many, it’s more affordable and accessible than they realise."

Paula Higgins, CEO of HomeOwners Alliance adds: "It’s deeply concerning that over 2 million mortgage holders are just a pay cheque away from financial crisis. A mortgage is likely the biggest financial commitment many of us will ever make, yet too many people are leaving themselves exposed. Without a safety net like income protection, a sudden illness or job loss could have devastating consequences, including losing your home."

This research highlights the need for industry professionals, financial advisers, and consumer organisations to collaborate in educating and empowering consumers, ensuring they are informed and equipped to make decisions that protect them from financial harm. For mortgage holders, understanding the importance of protection products and taking action before difficulties arise could make a significant difference.

At LifeSearch, we are committed to protecting people properly by providing accessible, affordable, and relevant protection. With over 25 years of experience, we help individuals and families find the cover they need to safeguard their future.