Millions of private renters have such fragile finances that they could not survive an illness or accident that would stop them working for three months or more.
In a staggering report, 40% of tenants admitted they had no savings and another 48% confessed their only financial survival plan was claiming benefits if they had to stay off work for 12 weeks or longer.
And nearly 5.8 million private tenants have not thought about a Plan B for paying their rent and essential bills if the worst should happen.
The research by insurance provider Royal London revealed:
- 39% have no savings
- 58% have a cash reserve of less than £2,000
- 66% owe between £2,000 and £10,000
- 14% owe more than £10,000
When asked how they would pay the bills if they could not work for three months or more, the tenants responded:
- 48% would claim state benefits,
- 45% said they would cut their living costs
- 36% said they would fall back on savings
- 4% said they would make a claim on an income protection policy
Jennifer Gilchrist, Insurance specialist at Royal London said: “Our research shows the average renter owes nearly as much in debt as they hold in savings, this highlights that the dream of owning their own home is a long way off.
“Only three in ten renters would receive full pay if they were ill and less than one in ten have an insurance policy such as income protection that could provide a monthly income if they were ill. Just over a third of renters said they could afford to live for fewer than three months if they couldn’t work, so they really need to think about what their financial plan B would be.”