Households may face debt as ‘incomes at risk’

Millions of UK households are not doing anything to protect their income and for many this could have serious consequences if they were to lose this supply of money, it has been claimed.

A Scottish Widows survey has found 33 per cent of households (8.5 million) are reliant on the income of one main breadwinner to the point where they could not cope with losing this.

In addition to this, 44 per cent of households are relying on having two salaries coming in, a figure that rises to 49 per cent for homes with dependent children in.

Market director for protection at Scottish Widows Clive Allison expressed concern that in such circumstances, most people are not taking steps to protect themselves against misfortune, with just seven per cent having income protection policies.

“Many millions of people are not protecting themselves in the unfortunate event of illness, an accident or death of the main breadwinner, which is leaving them vulnerable and in many cases unable to afford to support their families.” He remarked.

Those who do end up losing an income could find they need debt management plans to be able to cope with paying back what they owe.

And for families owing £15,000 or more, individual voluntary arrangements may be an option to consider, not least because having one of these can protect against repossession, an important consideration for homeowners who could find themselves struggling to pay the mortgage on a lower household income.

Concerns that income could be lost are a real fear for many, an HSBC poll showed this week.

It revealed 29 per cent of employees are worried they could be made redundant in the next 12 months.

Posted by Paul Thacker