Tenants go under protected

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Some 59 per cent of householders who rent accommodation in Scotland admit to having no form of financial protection in place – despite a third of them needing to take extended time off work because of illness or injury – according to new research from Scottish Widows. The insurance and pension provider’s data shows that the average period that people in Scotland have taken off due to illness or injury is about four and a half months.

Separate research from Scottish Widows found that 9 per cent of the UK population could last just one month in financially supporting themselves and their households if they were not able to work for an extended period of time.

The impact of unexpected periods of time off work can be easily underestimated, Scottish Widows warns. Financial Conduct Authority (FCA) figures show that a third of those who live in rented accommodation have seen rent payments increase in the short-term, leading to wider financial difficulties.

Scottish Widows adds that absence due to injury or illness can lead to a loss of earnings, hitting renters’ ability to make payments, as well as their wider financial security. Indeed, the research found that a third of people in Scotland report they didn’t receive any support from their employer during the time they needed to take off work.

Looking at why the levels of financial protection are low among renters, Scottish Widows says there is a clear awareness gap. More than a quarter of people in Scotland have simply never thought about financial protection, and 12 per cent believe they have no reason to have protection in place.

Cost is also a barrier, with 13 per cent of respondents looking into protection, but assuming it will be out of their budget.

Protection insurance is most typically taken out when buying a property, but, according to Scottish Widows, with the average age of a first-time buyer in the UK having risen to 34, and people opting to rent for longer, the insurer says it is vital more is done to support this growing cohort.

The research points out that 41 per cent of private renters in Scotland do have protection insurance in place. A fifth of people said they took it out because they had children and 10 per cent explained that they were prompted to take out insurance because someone close to them needed it, and they saw the benefit.

Rose St Louis, protection director at Scottish Widows, says: “Millions of renters are financially vulnerable, and this shouldn’t be ignored. Rising rents are taking up a higher proportion of people’s income, the cost-of-living squeeze hasn’t gone away and, for many, financial pressures aren’t easing.

“Buying an insurance policy against serious illness or loss of income isn’t just for those who have children or have opted to buy a home and take out a mortgage. It’s for everyone to help ensure financial security, meet outgoings, and keep a roof over their heads at any stage of life.”