Abacus Daily Debt News

Individuals ‘not prepared for loss of income’

Many people would find themselves quickly getting into debt management problems if they were to lose their main source of income, one expert has suggested.

Protection market director at Scottish Widows Richard Jones said that a number of individuals are not preparing themselves for the worst should it happen.

He remarked: “The fact that people rank financial protection, such as critical illness cover, alongside eating out and gym membership, shows that they aren’t truly assessing the risks they could face if the unexpected happens.”

While most individuals consider paying their household bills as their most important financial priority, many neglect to keep themselves covered for situations in which debts could build up, Mr Jones added.

According to a recent study by the organisation, 45 per cent of those surveyed replied that they would use savings to survive if they lost their main source of income, with 63 per cent of people having put aside between £500 and £1,500.

Chris Tapp of charity Credit Action recently commented that new statistics highlighting the UK’s debt problem should be a wake-up call for those who have borrowed too much.

By Francis Finch