Brokers can play a key role in safeguarding clients
Millions of UK mortgage holders remain financially exposed due to a lack of income protection — opening up both risks for borrowers and a business opportunity for advisers.
A report by LifeSearch and the HomeOwners Alliance has found that 36% of UK mortgage holders have no life insurance, income protection or critical illness cover — equivalent to around 2.34 million people. Despite many having conversations about protection during the mortgage process, the majority have not followed through with cover.
The research, which surveyed over 500 mortgage holders, also revealed that nearly half (46%) would be unable to keep up with mortgage payments within six months if they lost their income due to illness or injury. Alarmingly, 21% said they would start struggling within just two months.
This gap in protection is also relevant for mortgage brokers, many of whom are increasingly relying on protection advice to diversify income and deepen client relationships — especially in a slower purchase market.
While 67% of respondents said they had spoken to a broker, bank or family member about protection when arranging their mortgage, only 16% currently hold income protection policies. The results suggest a clear disconnect between the initial discussion and actual uptake — an issue where brokers can play a stronger role.
The report also highlighted what mortgage holders might do to stay afloat without income. While 29% would cut non-essential spending and 26% would seek a mortgage payment holiday, others said they would take more drastic steps. Nineteen percent would borrow from family or friends, the same number would sell personal items like cars or jewellery, and 19% would cut pension or savings contributions — decisions that could carry long-term financial consequences. A further 15% would turn to government support, and 8% would try for a bank loan.
“These findings highlight a worrying gap between intention and action,” said Debbie Kennedy (pictured left), chief executive of life insurance broker LifeSearch. “While many mortgage holders have spoken to someone about protection, far fewer have actually taken steps to put cover in place – leaving themselves, and their homes, vulnerable to life’s unexpected events.
“Protection isn’t just a financial product – it’s a safety net, a plan for the unexpected, and for many, it’s more affordable and accessible than they realise.”
Paula Higgins (pictured right), chief executive of property advice website HomeOwners Alliance, called for better signposting at the point of sale.
“These findings should serve as a wake-up call,” she said. “It’s deeply concerning that over 2 million mortgage holders are just a pay cheque away from financial crisis, with no protection in place.
“Clearer communication and better signposting at key life stages, like taking out a mortgage, could help people make informed decisions and avoid financial freefall.”
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