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Not enough women making a financial ‘Plan B’

UK, July 15, 2014

In a new report from Aegon UK, 71% of mothers ranked the financial security of their children as one of their top priorities, but almost half have never had a discussion with their next of kin about what would happen if they died.

Putting off discussing this subject is a serious issue, especially as 67% of women, and almost three in four (72%) mothers now work to support their growing families1. They appear to be underestimating their financial importance to the family unit.

Aegon's research reveals that nearly three in five (57%) women aged 25 and over do not have any form of protection cover, and almost one in three (28%) working women would need to rely on state support if they were unable to work for six months.

When asked to think through the consequences of being out of work for six months, over one in four (27%) working mothers surveyed admitted that they would have to stop heating their homes, and nearly a quarter (23%) of those paying childcare would have to stop all paid childcare - having a significant impact on their lives.

Forced to sell the family home

One in 20 (5%) working homeowners would consider selling their home to pay for general living costs.

Despite these implications, more than two in five (41%) do not have any form of protection should they die or be left unable to work. Despite this, if offered £180 (approximately 200 euro) to spend on anything they liked, only two per cent of mothers of children under 18 would spend it on a year's life insurance at £15 a month. One in four (25%) would put the money towards a holiday, one in six would spend it at a restaurant (16%) and another one in six (15%) would treat themselves to a new outfit.

Relying on state support

Almost one in three (28%) working women say they'd need to rely heavily on state support if they were unable to work for six months. Aegon's research also found that more than half of all women (55%) have no idea how little state support pays out. Against a woman's average annual income of £23,589 a mother would face an annual pre-tax shortfall of £21,137.50.

Despite all of this, nearly half (49%) of mothers with children under 18 say they have never had a single conversation with their next of kin about what would happen if they died.

Reluctance to discuss with partner

Dougy Grant, Protection Director, Aegon UK said:"Whether it's a reluctance to discuss the unimaginable, a feeling that protection isn't affordable, or simply a lack of awareness about the services on offer, there are plenty of reasons why many women aren't insuring themselves for the benefit of their family. There's a clear disconnect between the peace of mind of protecting our most pressing priorities and consumer behavior."

1ONS, 2013 Women in the labor market http://www.ons.gov.uk/ons/dcp171776_328352.pdf

Written by: Aegon