Only 7% of private tenants have any protection cover

Just 7% of private tenants have any financial protection cover, compared with 28% of those with a mortgage, according to the latest Protection Report from Scottish Widows.

With as many as 29% stating they have no savings whatsoever and in general significantly less holding a pension, ISA, or other investment compared to those with a mortgage, private tenants have a lot to lose if they or a partner are unable to work.  A further 31% said their savings would last just three months at the most to pay household bills, emphasising the importance for many to have adequate protection cover in place.

Tenants with any savings, potentially for a deposit, may have to rely on them to cover day-to-day living costs if unable to work through illness or disability.  Any lump sum savings are means tested for benefit applications and taken into account in what people receive in support. 

Currently almost 8 million UK adults rent privately in the UK and with house prices rising and tougher mortgage application rules, this number is only expected to keep increasing.

Taking out a mortgage to purchase a house is still too often the trigger point for financial planning through the purchase of a protection product, be it as an individual or family. With more people renting, this traditional trigger point is being missed and often means people are just not aware of perhaps how financially exposed they are.

Many private tenants are still keen to get a foot on the property ladder and are having to stretch themselves to save for a deposit and make ends meet on a day-to-day basis with both rental prices and the cost of living increasing at the same time.  Reasons of cost, feeling they don’t really have anything to protect and lack of awareness, mean many private renters are left significantly under-insured.