Almost five million in generation rent at risk reveals Royal London research
18 May 2016
Results from a survey by YouGov, commissioned by Royal London, reveal almost five million renters in the UK have no plans in place to cover their rent if they became too ill to earn for three months or more, even though recent cuts to housing benefits1 could leave them at risk. This is despite the fact that over a quarter of renters in paid employment (27%) said they knew someone who had struggled in this situation.
More than one in three renters in paid employment (34%) admit they don’t know how long they could survive, and six in ten people (60%) who had some idea said they could only survive on their savings for three months or less. Their first port of call would be to apply for state benefits (53%), followed by reducing their household expenses (47%) and then dipping into their savings (39%).
Worryingly, fewer than one in ten (7%) renters in paid employment have ever consulted a financial adviser. The most common place people turn to for financial advice is their family and friends.
Debbie Kennedy, Head of Protection for Royal London Intermediary, said:
“Renters who assume that housing benefit will be there when they need it could find the reality is very different. A series of cuts to housing benefit means that more people would not get their rent paid in full if their income fell unexpectedly.
“It would be bad enough to be taken ill without the added anxiety of getting behind with the rent and facing possible eviction. Income protection may be more affordable than people realise and can provide a financial safety net and enable people to focus on getting better.”
Economists2 predict over the next ten years the UK will experience falling levels of home ownership and rising levels of private renting. In ten years' time, 59% of 20-39 year olds will rent privately, up from 45% in 2013. A further 15% are in social housing, renting from housing associations or local authorities.
- ENDS -
For further information please contact:
020 7506 6719
Notes to editors:
- Some people would not get their rent paid in full if they lost their income. This includes those with £16,000 or more of savings or those with a partner who earns a reasonable income. In addition, several recent cuts have extended the number of people who would not get their full rent covered if they were off sick. These are:
• Extension of the ‘shared accommodation rate’ policy from the under 25s to the under 35s; most single people under 35 can now only get housing benefit to cover the cost of a room in a shared house, even if they are actually renting accommodation of their own;
• The ‘bedroom tax’ which means that people renting from councils and housing associations cannot get their full rent covered if they have a ‘spare’ bedroom this principle is already part of the rules for private tenants who can only claim up to the rent for a house of the size that they are deemed to need;
• Private tenants are only able to claim up to a ‘Local Housing Allowance’ in their area, which is based on the lowest 30% of rents previously the reference rent was based on the lowest half of rents;
• There are overall caps on the amount of benefit that a family can receive, and these caps are being steadily lowered any excess is deducted from an individual’s housing benefit entitlement.
- PwC – UK Economic Outlook
- Methodology: research was conducted by YouGov from 17th to 18th February 2016. The survey was conducted online among YouGov’s UK panel of 350,000+ individuals. 2,009 UK adults took part in the research. The figures have been weighted and are representative of all UK adults (aged 18+). 542 respondents were renters and among this group 255 said they earned their income from employment. In UK population terms, this equates to 6.5m UK adults. In addition, 605 respondents were mortgage holders and among this group 494 said they earned their income from employment. In UK population terms, this equates to 12.7m UK adults.
- Population calculations are based on ONS population data which estimates that as at 30 June 2014, there were 50,910,000 adults living in the UK, a number which is rising by 0.7% each year. Based on these assumptions, we calculate that as at the end of February 2016, there were 51,523,000 adults aged 18+ living in the UK.
i Almost 5m figure: YouGov found 13% of UK adults rent and earn an income from employment = 6,697,990; 73% of this group said they have no plan in place to cover their rent. 73% of 6,697,990 = 4,889,533.
To find a financial adviser click here www.unbiased.co.uk.
Advisers wanting more information on Royal London income protection should visit http://adviser.royallondon.com/protection/.
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £84.5 billion. Group businesses provide around 9.1 million policies and employ 2,988 people. (Figures quoted are as at 31 December 2015).