Low awareness of income protection among younger buyers highlights need for better industry support
A large number of young homeowners in the UK could be financially vulnerable due to low awareness and uptake of income protection and related insurance products, a new study has found.
The research, conducted by protection adviser LifeSearch in collaboration with the HomeOwners Alliance, surveyed more than 1,200 homeowners, including 500 mortgage holders. It revealed that just 15% of mortgage holders aged 18 to 34 claimed to “know a lot” about income protection, highlighting a significant gap in financial awareness among younger borrowers.
Despite being at a stage of life where changes in employment, illness, or economic shocks are common, many younger mortgage holders are under-insured. While over half (54%) reported having life insurance, LifeSearch indicated that actual policy uptake in this age group is likely lower than self-reported figures suggest.
Alarmingly, 30% of young homeowners said they had no financial protection in place at all, such as life insurance, critical illness cover, or income protection – policies designed to provide financial support in the event of death, serious illness, or an inability to work due to health issues.
The lack of protection is not limited to younger borrowers. Across all age groups, 36% of UK mortgage holders lack any form of income or life cover — equating to around 2.34 million people, according to the findings.
The consequences of this protection gap could be severe. The survey found that 14% of young mortgage holders would immediately struggle to meet their repayments if they lost their income due to sickness or injury. More than half (57%) would face difficulty within six months.
When asked how they would manage a sudden loss of income, many said they would rely on short-term solutions. Nearly a third said they would try to take on extra work, while others would cut savings or pension contributions, apply for government assistance such as Universal Credit, or consider taking out a bank loan.
These strategies may offer temporary relief, LifeSearch said, but could lead to long-term financial strain, particularly given the already stretched finances and uncertain employment conditions faced by many in this age group.
“This is a generation full of ambition – but without the guidance and support to match,” said Debbie Kennedy (pictured left), chief executive of LifeSearch. “Many under-35s are navigating some of life’s biggest financial commitments without knowing what protection is available to them, let alone having it in place.
“Income protection isn’t just for older workers or high earners – it’s for anyone who depends on a regular income to cover essential costs. Without it, the impact of a sudden illness or accident could be significantly more concerning.”
For Paula Higgins (pictured right), chief executive of the HomeOwners Alliance, the various risks tied to homeownership meant younger buyers should require more support.
“Buying a home is a proud moment – but it comes with risks,” Higgins said. “For young homeowners, the stakes are high: many have stretched to afford their property, and their financial resilience is often still being built.
“We need to do more to support young people in staying financially secure, especially as they take on the long-term responsibility of a mortgage.”
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