Only 43% of employees see their salary as a top financial asset according to new statistics from Friends First. From those surveyed, when asked to rank their financial assets in order of importance, their salary was ranked fourth in line after their home (67%), savings (57%) and pension (48%).
The majority of those in employment have heard of income protection (80%). This is significantly higher amongst those people who have a pension. However a fifth of workers have never heard of income protection.
Of those aware of income protection, the majority (60%) of those surveyed perceived it to be relevant to them. However, fewer self-employed people deemed it relevant when compared to employed people (57% and 63% respectively), despite not being entitled to access social protection payments in the case of illness.
When workers who considered income protection relevant to them were asked how long they could cope without their income, 44% said for 3-6 months, 30% said 6 months to a year, while less than one in ten (8%) suggested they could sustain themselves financially for two years or more. Fifteen percent said they didn’t know, while only 3% said they could cope without their income until they got better. The average income protection claim lasts 5 years, which represents a potentially very large gap in a person’s finances.
When this group was asked about an appropriate amount of income to protect, two thirds (66%) agreed 51-75% of their income would be sufficient. Just over a quarter (27%) felt between 25-50% would be appropriate and the remaining (7%) thought under 25% of their income would suffice. Interestingly, those who were full-time employed deemed it important to protect more of their income than those who were self-employed with almost seven in ten (69%) saying they would protect between 51-75% of income compared to a smaller percentage of 57% of those self-employed.
Commenting on the research, Protection Director with Friends First, Karen Gallagher said, "The findings unearthed in this research are quite striking particularly in relation to how people view their assets. They show that when people think of assets they think of homes, savings and pension, with their salary coming in at fourth position. The fact is that, generally speaking, without their income they would have none of those assets."