03 February 2020

Deadline to Breadline Research: Shaping understanding of clients' protection needs

The idea of developing a severe illness or disability is a worrying one. Many of us rely on our health for the ability to pay for our lifestyles. What if that earning capacity was taken away? How would an employee survive financially, if faced with an event such as being diagnosed with a severe illness that disrupted their income?

At Legal & General Group Protection, our goal is to help our customers protect their employees, and to support intermediaries achieve this. We regularly carry out ‘Deadline to Breadline’ research*. This investigates the average time UK employees and their households could survive financially if long-term sickness, critical illness or death intervenes.

It is important that we understand the financial situation of UK employees, so we can shape our products to match customer needs, and help you put the best combination of products in place to protect your clients.

UK employees just 32 days from breadline

Analysis of our research* shows that UK households suffer from a savings and protection gap, and therefore a shortfall in financial wellbeing and security. We found that:

  • 23% of employees do not save any of their income each month - so they could be on the breadline tomorrow.
  • 30% of employees in the UK don’t have any financial back-up plans, in case they are affected by long-term critical illness, disability, loss of salary, redundancy, or death.
  • The average UK household debt is £4674, while 8% have a debt of over £20,000.
  • 25% of respondents had to use a credit card within the last month to pay for essentials they couldn’t otherwise afford.
  • On average, UK employees have just over £6,500 in savings. Yet to feel financially secure they believe they would need a further £9,830.
  • Northern Ireland had the longest deadline, with individuals saying they would last 36 days on average. In contrast, Wales had the shortest at 26 days.

Why your clients should protect their employees?

Our ‘Deadline to Breadline’ findings make it clear that many of us essentially ‘rent’ our current lifestyles, paying for expenses monthly as we receive our salaries. But questioning what would happen if that regular income was removed, is vital to ensure future financial security. If an unexpected event crops up, your client’s employees could lose the ability to pay for their way of life, and even their home.

Let's talk Critical Illness and Group Income Protection

In case of critical illness or injury, have your client’s employees considered how long their savings – if they have any - might last, and how much sick pay or even state benefits would amount to?

By offering Group Income Protection Benefit and Critical Illness Cover, your client will be helping to cast a financial safety net to their employees.

We offer two valuable staff benefit solutions, that could help provide reassurance when an employee experiences a serious illness or injury.

Critical illness cover provides a tax-free cash lump sum if an employee has been diagnosed with a specified serious illness or condition - while Income Protection is designed to pay out a monthly benefit if an employee is unable to work due to illness or injury, resulting in a loss of earnings while covered by the plan.

There is currently a savings and protection gap in the UK - but it doesn’t have to be that way that way for your employees. Visit our product pages to find out more about Critical Illness Cover and Group Income Protection.

* Our research, which was supported by analysis from Censuswide, draws on a survey of 2,027 employees representative of the UK adult population.

** Sources: Legal & General - The impact of critical illnesses on the UK economy report, British Heart Foundation 2018, Cancer Research UK 2018, Stroke Association 2018 and MS Trust 2018.