Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Cost of Living Pressures Impact Protection Cover Uptake, LSL Finds
Rising living costs are creating affordability challenges for protection advisers, according to new research from LSL Financial Services. A survey of brokers at LSL’s inaugural Protection Forum in May found that income protection is now seen as the area of greatest customer need.
Eighty-six per cent of respondents identified income protection as the most important form of protection, compared with 7% for critical illness cover and 5% for life-only term assurance. The findings come as household finances remain under pressure, with two-thirds of brokers saying the cost of living—including food, energy, and household bills—was having the biggest impact on customers’ financial confidence. Only 15% cited mortgage rates and borrowing costs as the main concern.
The same cost pressures are making protection harder to afford. Almost two-thirds (64%) of brokers said affordability was the main reason customers were declining protection cover, with many customers reporting that household budgets were already stretched by other expenses.
The survey also found mixed signs on demand for protection products. More than half of brokers (57%) said customer demand for protection had not changed, 8% reported falling demand, and 35% said demand was increasing.
LSL Financial Services stated that the results highlight a difficult advice environment. Customers are becoming more aware of the need to protect their income, but many have less room in their budgets to take out cover.
For UK letting agents and inventory clerks, these findings underline the ongoing financial pressures facing tenants and landlords alike, particularly regarding the ability to maintain income and meet essential payments.
Source: Mortgage Strategy