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14m unprepared for loss of income

More than half of the UK workforce admit they would struggle financially after an accident, illness or unemployment, according to new research.

Alliance & Leicester estimates that more than 14 million people would be unable to manage financially if they lost their income.

More than one in five had no insurance and hardly any savings, leaving them to resort to personal loans or the kindness of relatives. Nearly two in five claim they would be able to manage, but 19 per cent would be forced to empty their savings or rely on a partner's income.

Lindsey Henson, manager for protection at Alliance & Leicester, said: "It's easy when you're busy with your working life to take the security of a monthly income for granted.

"However, if you become ill, suffer an accident or are made redundant then you may be unable to earn an income.

"It is vitally important to consider what measures you can put in place to ensure you can continue to meet your financial commitments and maintain a reasonable standard of living."

Of those that did have some back-up funds, 46 per cent admit they would need another £1,000 a month to supplement their savings and nearly a quarter would need an additional £1,500.

Mr Hensen added: "Savings may help you get by for a while, but if you are unable to work for a long period of time, your hard-earned savings can simply disappear."

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19/12/2006 10:50:22

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