Advisers report clients cutting cover despite heightened awareness of financial risk
More homeowners are growing concerned about their ability to meet mortgage repayments if their income were to fall, yet rising household costs are pushing many to cancel or cut back on the very cover designed to protect them, according to new research from insurer MetLife UK.
Three in four advisers (75%) report that clients are now more concerned about mortgage protection than they were 12 months ago, with 22% describing clients as "much more concerned" and 53% as "slightly more concerned". Only 18% of advisers observed no change in client attitudes.
However, financial pressure is simultaneously driving policy cancellations. More than three quarters (77%) of advisers have seen clients cancel or reduce their level of protection over the past year — 25% reporting a significant increase in cancellations and 52% a slight increase. Only 16% reported no change.
Intention gaps are also proving a persistent challenge. More than two fifths (43%) of advisers said they often hear clients express an intention to take out mortgage protection but then fail to follow through; a further 24% said this always happens following such conversations.
The findings point to an affordability constraint undermining awareness gains across the protection market.
"Households across the UK continue to face difficult financial decisions, and our research highlights a worrying contradiction: people are increasingly aware of the need for protection, but some are having to make difficult choices as budgets remain under pressure," said Phil Jeynes (pictured right), head of individual protection at MetLife UK.
"We get it. We understand that families are making difficult choices about where their money goes, and that protection has to compete with many other household priorities. That is why advisers play such an important role in helping customers understand the value of cover and make decisions that are right for their circumstances."
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