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Half of workers would feel more financially resilient with protection in place, finds LV=

The Reaching Resilience report showed that over four in 10 had no protection in place, either from themselves or their employer.

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LV= has found that half of UK workers would feel more financially resilient if they had insurance in place to cover their monthly outgoings or pay a lump sum for serious illness. 

The Reaching Resilience report showed that 68% of workers said they were ‘quite’ or ‘very’ financially resilient, but over four in 10 had no protection in place, either from themselves or their employer.

When asked what they would rely on if they could not work for two months or more due to illness or injury, most said savings, employer sick pay or support from a partner. 

LV= found that for many, these sources would be hard to rely on for long. 

One in 10 had no savings, one in four had less than £1,000, and nearly half had less than £10,000. 

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LV= also found that one in five employees did not know what sick pay they would get, and just a third were confident they were eligible for it. 

Most workers expected any support to last only 12 weeks or less. 

Additionally, the report found that 41% of working couples needed both incomes to cover living costs, rising to 52% among first-time buyers (FTBs). 

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On average, workers supported three people with their income. 

Nearly half of households would only manage up to three months without an income.

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Half of workers said insurance that protects their income would make them feel more financially secure if they could not work for two months or more. 

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Mike Farrell, protection sales and marketing director at LV=, said: “The research highlights a clear protection gap between how financially resilient many workers feel and how prepared they actually are for an interruption to earnings. 

“While many describe themselves as very or somewhat financially resilient, far fewer have any form of protection in place.

“For households managing ongoing debt and increasingly reliant on continuous income, the loss of earnings can quickly have serious financial consequences, particularly where savings or employer support are limited.”

Farrell added: “As a result, it’s important for people to seek guidance from a financial adviser.”

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When asked about their protection risks, 45% of workers said they did not think serious illness, death, or illness or injury leading to two months off work would happen to them over the next decade. 

64% of workers said a personalised risk report could influence their decision to take out protection.

Jo Miller, managing director at the Income Protection Task Force, said: “This data reinforces that income protection is a core component of effective financial planning, particularly in today’s uncertain environment. 

“LV’s research shows a significant gap remains between financial confidence and real preparedness.

“Too many people still lack the cover they would need to remain financially resilient if their income were disrupted.”

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Miller added: “These findings reinforce why protection should sit at the heart of financial planning and the critical role advisers play in helping clients build resilience that extends beyond savings and short-term support.”

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