A protection study by Aviva has uncovered that nearly one in three (31%) UK adults have had to take leave from work due to ill health, a cancer diagnosis or death in the family and 77% of these people (12.3m consumers) have seen their finances hit as a consequence.

The study found that the 31% who have experienced unexpected poor health or death have seen their income drop by a quarter (24%) and savings and investments crash by two-fifths (40%). Two in five (38%) had to apply for benefits or other Government support while 22% had to use their savings.

One in six (15%) had to downsize, move in with family, rent or in extreme cases even became homeless. Some 1.9 million people who have experienced an unexpected illness or death don’t think they’ll ever financially recover, says Aviva.

Aviva’s Protecting Our Families report shows potential financial fall-out caused by unexpected illness, with a particularly damaging effect on families with young children. The research shows more than a quarter (27%) of parents with dependent children have suffered a health crisis, with nearly all (91%) of these saying their finances were negatively affected.

UK adults who have suffered unexpected health events have noticeably poorer finances. Aviva’s data shows the average monthly income of someone who has experienced this is 24% lower than those who have not (£1,909 vs. £2,518). They also typically have 40% less in savings and investments (£2,991 vs. £5,011). In addition, they have 47% more in average debt (£9,692 vs. £6,573), possibly suggesting many who experience a health crisis are forced to turn to borrowing to cope.

Paul Brencher, Aviva UK health and orotection director, said: “Millions of people have seen their finances damaged by poor health: without any plans in place, a loss of income caused by ill-health can have a long-lasting effect on people’s finances. This can be particularly difficult for those with a family to support, who often have a range of financial obligations – such as mortgage payments and bills – and also the added concern of how they will provide for their children.”

“Our research shows that many people who have experienced a health crisis have resorted to a number of unpleasant measures, like using nearly half of their savings, selling their personal possessions or even their home. Addressing the question of ‘what would I do if...’ is critical.

“The Government can also help by continuing to make available, and improving, information on financial education and assistance for families, whilst the insurance industry must do all that it can to correct the perception that insurance is unaffordable and make applying for insurance simple and easy to do.”

• The ‘Protecting Our Families’ study was designed by Aviva in collaboration with ICM Unlimited and Instinctif Partners. All findings are from research carried out independently by ICM during Q4 2016 among a representative sample of 2,500 UK adults, including 784 who have experienced loss of income due to ill health, serious illness or death within the family.