"There are educational and awareness needs on many levels here."
- Jamie Leong - Walsham Brothers
New research from Walsham Brothers has found that 81% of homeowners want their mortgage advisers to routinely discuss how customers would manage their mortgage payments if they were to become unemployed.
At the same time, 58% of respondents say they expect redundancy risk to increase within the next five years, rising to 61% among Gen X, those aged between 46 and 61, and 63% among Baby Boomers, those aged between 62 and 80.
Yet, among those respondents who have used or arranged a mortgage, only 26% recall their adviser having that conversation. That said, 23% said they couldn’t remember and 20% said they did not use a mortgage adviser.
Meanwhile, 56% said they were not aware that insurance covering involuntary redundancy/unemployment could be purchased on its own, without accident or sickness cover.
Just 10% have insurance to protect their income and payments if they were made redundant. Of those who had considered taking out redundancy cover but decided against it, cost was the main barrier, cited by 32%, followed by 17% who didn’t believe they needed it.
These findings come after a survey by Acas found that a third of UK employers are predicted to implement staff redundancies by January 2027.
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"Consumers have told us they want advisers to highlight the risk of redundancy to them, at a time when that risk feels very real," Jamie Leong, senior manager – product & propositions at Walsham Brothers, said.
"But few recall this happening; either clear that it didn’t, or not clear either way. Plus, a fifth simply didn’t use a mortgage adviser.
"There are educational and awareness needs on many levels here; from the value of taking advice when making a home purchase, probably the biggest purchase we make in our lifetime, to advisers discussing all risks, grounding them in reality and making it clear that redundancy cover is low-cost. For example, a 38-year-old could expect to pay £23.67 a month for £1,500pm benefit.
"At a time when the FCA’s Pure Protection Market Study is helping shine a light on accessibility, we all need to be looking at consistent and innovative ways to close the protection gap for the three-fifths (59%) of people who have never considered their protection needs.
"Some cover is always better than none. And cover for a risk that’s not included as part of traditional income protection - in other words, redundancy - could arguably be considered an essential for all."
