Lack of financial provision could see one in eight potentially having to sell their home if they lost their income, a new survey has revealed.

The ‘Cost of Resilience’ report, from Zurich, showed that more than half (53%) of UK adults had been out of work, yet had no financial provision in case it happened again.

Data showed 13% said they would have to sell the family home if they lost their income and one in six said they had no disposable income.

A quarter had no savings and 92% of those polled had no income protection cover.

Anecdotally, 34% did not feel “financially resilient” and would not be able to manage a financial shock of unexpected loss of income on their own, the study found.

The report revealed that UK adults would have to do the following if they lost their income to sickness of injury:

1.     Relying on savings for the short term (i.e. less than 6 months) – 40%
2.     Finding a second job that I could do with my illness/ injury – 39%
3.     Selling other possessions (e.g. any valuables, etc.) – 26%
4.     Relying on savings for the long term (i.e. 6 months or longer) – 23%
5.     My partner would start work/ increase their hours – 18%
6.     Selling my car – 17%
7.     Moving in with friends or relatives – 16% 
8.     Finding a cheaper place to rent – 14%
9.     Selling my home – 13%
10.  Getting a lodger – 11%
 
Rose St Louis of Zurich UK said: “It’s concerning that so many people have experienced unexpected time out of work, yet have no safety net in place for this potentially happening again.

“Even more shocking is the number who would have to resort to selling their home, as this action could have a significant impact on the whole family. 
 
“Lack of savings and planning the family finances is putting millions of adults at risk of not being financially resilient, but not taking action could make the situation far worse.

“Putting the ‘it won’t happen to me’ view to one side, it’s vital that people review their circumstances, to see what support exists to protect their finances and lifestyle.”

The Cost of Resilience report was developed with neuroscientist Dr Jack Lewis and examined the impact that money, including having products designed to protect and insure against loss, had on feelings of resilience.
 
Dr Lewis said: “The findings demonstrate the very real impact that a period of being unable to work can have.

“We have a tendency to prefer items that we can enjoy immediately over and above valuable things that we have to wait for, even when the latter adds greater value to our lives overall.

“A financial product that pays your salary when you are too ill to work is a strange and perhaps counter-intuitive concept.

“So, we need to educate people to help them understand that such support exists; products that ease the stress and anxiety stemming from the threat of an unanticipated loss of income.”