Half of women have never discussed financial implications of death
A report by insurance group Aegon, ‘What Really Matters’, found that women are increasingly the main or equal breadwinner of the household, and 67% now work to help support their family. Yet the majority have no plan in place were they to die or be unable to work – almost one in three (30%) working mums have no savings whatsoever, and only just over one in 10 (13%) has enough to last more than a year.
The survey calculates that those at work face a £21k income shortfall should they fall ill and be unable to work for a year.
The report surveyed women aged 25 and over. It found that seven in 10 (71%) mothers seeing the financial security of their children as among the top priorities in their life, but Aegon concluded that many are underestimating their financial importance to the family unit. Almost one in three (28%) of working women would need to rely on State support if they were unable to work for six months.
Aegon also considered the potential consequences of being out of work for six months: over one in four (27%) of working mothers surveyed admitted that they would have to stop heating the home, while 23% of those paying childcare would have to stop all paid childcare. One in 20 (5%) working homeowners would consider selling their home to pay for general living costs.
This is not simply a problem for working mothers, said Aegon. If those at home were unable to look after the children, the potential added cost to the working parent would be £7,549 per year (the average fees for one child in part-time nursery and another in an after-school club).
Nearly half (49%) of mothers with children under 18 admit they’ve never had a single conversation with their next of kin about what would happen if they died. This is even higher for stay at home parents of which 58% haven’t spoken to those closest to them.
Aegon believes there is a ‘protection gap’, where women do not take out life assurance because they believe it is not necessary or too expensive: 37% cite affordability as a key reason not to take out cover, while more than a quarter simply don’t see it as a priority.
Sarah Pennells, Consumer Expert and Editor of SavvyWoman.co.uk, said: “While women are increasingly in charge of family finances, they are falling behind when it comes to thinking about what would happen to their finances if they could not work or couldn’t take care of their children. I was struck by the fact that almost three quarters of mums say that the financial security of their children is a top priority, but one in three has no savings and four out of 10 have no protection cover.”
“Preparing ahead for long-term illness, or worse, isn’t just about assessing how much savings you have or whether you should consider taking out a protection policy. It’s also about discussing who you‘d like to manage your finances for you if you’re unable to do so; who should look after your children if both you and your partner die and what arrangements need to be made after your death.”