According to a report from HomeOwners Alliance, which surveyed around 500 mortgage holders, 36% have no life insurance, income protection or critical illness cover. This equates to around 2.34 million mortgage holders across the UK.
Almost half – 46% – said they would struggle to keep up with their mortgage payments within six months if they had a loss of income due to injury or illness. A fifth said they would face difficulties in two months.
More than two-thirds said they spoke with someone, like a mortgage adviser, bank or family member, about protection when they took out a mortgage, but only 16% have income protection in place.
Nearly a third would lower non-essential spending to keep up with mortgage payments, while 26% would request a mortgage payment holiday.
Almost a fifth would borrow money from family or friends, and a similar number would sell valuables such as their car or jewellery.
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Around 15% said they would apply for Government support like Universal Credit, 8% would try to take out a bank loan and 19% would cut their savings or pension contributions.
Paula Higgins, CEO of HomeOwners Alliance said: “These findings should serve as a wake-up call. It’s deeply concerning that over two million mortgage holders are just a pay cheque away from financial crisis, with no protection in place. A mortgage is likely the biggest financial commitment many of us will ever make, yet too many people are leaving themselves exposed.
“We understand that life is busy and budgets are stretched, but without a safety net like income protection, a sudden illness or job loss could lead to devastating consequences – including losing your home.
“Clearer communication and better signposting at key life stages, like taking out a mortgage, could help people make informed decisions and avoid financial freefall.”
Debbie Kennedy, CEO of LifeSearch, said: “These findings highlight a worrying gap between intention and action. While many mortgage holders have spoken to someone about protection, far fewer have actually taken steps to put cover in place – leaving themselves, and their homes, vulnerable to life’s unexpected events.
“The reality is that illness or injury can strike at any time, and for those without income protection, the financial consequences can be severe – from falling behind on mortgage payments to relying on family or dipping into long-term savings.
“Protection isn’t just a financial product – it’s a safety net, a plan for the unexpected, and for many, it’s more affordable and accessible than they realise. At LifeSearch, our mission is to protect people properly – helping them understand their options clearly, and to put the right cover in place before a crisis hits.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: More than two million UK mortgage holders don’t have financial safety net
