"I would urge advisers working with non-homeowner clients, to discuss these potential issues and highlight renters' increased vulnerability to financial shocks."
The figures are only slightly better for homeowners, with one third (33%) having life insurance, 11% taking out critical illness cover and 7% taking out income protection.
Against this backdrop, nearly a third (31%) of renters said they had taken an extended period of unpaid time off work due to illness or to care for a family member or friend.
Renters are subject to higher housing costs on average than those who own a home. Homeowners spend £525.90 a month on mortgage payments, whilst renters spend more on rent at a monthly average of £658.
That means renters are arguably in greater need of a safety net, as their outgoings on average remain higher – and they have no property to raise credit against if needed.
However, the vast majority of renters have no cover in place. Digging into the factors for not taking out critical illness cover or life insurance, the most commonly-cited reason was that it’s not a financial priority at the moment, referenced by more than a fifth (21%) of renters compared to 16% of homeowners.
Rose St Louis, protection director at Scottish Widows, said: “The vast majority of renters and homeowners have no cover in place and the impact of this could be really frightening. If one day they are unable to work due to health reasons or unforeseen circumstances, millions may be unable to pay their bills and asked to leave their home.
“I would urge advisers working with non-homeowner clients, to discuss these potential issues and highlight renters' increased vulnerability to financial shocks. Helping clients who rent to consider their protection needs will ensure they’ve thought about the future, with any plans taken out providing a ‘safety net’ for themselves and their families.”
