Zurich UK has revealed that millions of UK adults do not feel financially resilient and that they would not be able to manage a financial shock or loss of income.

One in three adults which is the equivalent to more than 17.6 million adults across the UK say that they would not be able to recover quickly from an unexpected financial shock, according to the research.

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For example, unanticipated period without household income or a sudden need to spend a significant amount of money.

Furthermore, the research has also revealed that almost a quarter of UK adults (24%) have no savings to fall back on if a financial loss should occur.

Rose St Louis of Zurich UK said: “It is worrying that one in three do not feel that they would be able to recover from a financial shock or loss of income, and do not have the savings in place they need to feel financially resilient. The most valuable asset we have is ourselves and our ability to generate an income. Therefore it’s a concern that nine in ten are likely to prioritise insuring their mobile phone over themselves.”

The study found:

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  • 37% of participants said that they needed to have savings in order to be financially resilient
  • 22% said that they would need to not be in any debt
  • 17% said they would need to be in a secure job
  • 33% mentioned that the amount that they earned would have an impact on financial resilience.

ONS statistics revealed that the average net UK income is £1,278. This means that adults could be earning slightly less than the amount needed to feel financially resilient.

However, Zurich UK said only one in ten have income protection, a product that shields income against any illness or injury which could prevent an individual from working.

The insurer said people are more likely to have insurance for their homes (71%), holidays (70%) and mobile phones (18%).

Zurich UK

Zurich UK’s The Cost of resilience report was developed by neuroscientist Dr. Jack Lewis and examines the impact that money, including having products designed to protect and insure against loss, have on feelings of resilience.

Dr Lewis commented: “This study show all the hallmarks of a psychological phenomenon called the ‘availability heuristic’. This describes our tendency to feel a stronger perception of risk and so we feel more motivated to protect ourselves against that risk. Examples of when car, home and holiday insurance could come to the rescue are simply much more available than the benefits of income protection, because they are more commonly encountered in everyday life.

“By comparison, I cannot think of a single occasion when I heard someone explaining what a lifeline their Income Protection was when they lost their job, and I am sure this is the same for many others. We need to educate people and help them to understand that there’s support out there; there are products to ease the stress and worry of a financial shock and loss of income.”