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The Standard of Living Survey – February 2013

In a survey of more than 1,000 people, 40% of whom were married with children, we have uncovered some significant and interesting points about the state of the economy and the perception of the insurance industry.
The following outlines the key findings from our survey and represents the data for your use. Please contact LifeInsurance.org.uk if you wish to utilise and republish this data.

Key Findings

  • Gadget insurance is more important than funeral insurance to Londoners
  • The average age bracket in which people take out life insurance is 26-30
  • The banks are to blame for the economic downturn according to 75% of respondents
  • Women more likely to take out life insurance to cover their children and mortgage
  • Men more likely to take out cover for health and occupational reasons
  • The Midlands saw the greatest divide in opinion of how wages have increased in line with the cost of living
  • Most people (58%) who took the survey don’t have life insurance.
    • 51% of those don’t have life insurance because they think it is too expensive, while a further 45% said that they don’t think they need it

Overview

The most common outcome of the questions we asked about life insurance was that it was consistently held in higher regard than car breakdown cover, income protection, health insurance and funeral insurance, but was thought to be less of a requirement than a pension, savings and home insurance.

Overall, gadget insurance was ranked the least important of all the options, but, rather surprisingly, it was thought to be more important than funeral insurance amongst Londoners.

This table represents the answers respondents gave when asked to rank these things in order of importance:

The average amount of life insurance cover for people in the UK is around £75,000, but a quarter of people are only insured up to £25,000. Over 43.5% of people indicated that children were the reason they chose to take out a life insurance policy, while over 55% stated a mortgage as the deciding factor.

This is in line with the fact that the most popular age to take out life insurance is between 26 and 30, which is on par with the average ages at which people get a mortgage and start a family.
Only 1% of respondents take out life insurance after the age of 60, which suggests that more young people are taking out life insurance than commonly thought.

In the continuing economic downturn, 31% of people are resorting to cancelling insurance products, with 55% of those respondents stating that they cut back on insurance to save money.
49% of the people who said they had cancelled an insurance product said they ‘no longer required it’.

Men vs. Women

The trend of cutting back takes an interesting turn when the results of our survey are broken down by gender.

Overall, women are much more willing to cut back than men, with holidays and luxuries being the first to get the chop. Men, on the other hand, are more likely to want to cut back on insurance than women.

Saving money also applies not only to food bills, but to clothing, too, with some men slightly more keen than women to visit second hand shops, food banks and clothes banks. The majority of respondents, however, stated that they hadn’t felt the need to visit these places at all.

The financial suffering continues as we look at wage increases over the last five years. In comparison to women, three times as many men felt that their wages have risen enough to cover the cost of living in that time, but the majority of people (82% of women and 77% of men) felt that their rise in pay was insufficient.

The ‘Typical’ Profiles

The data collected from 1,000 respondents told us that the typical life insurance policy holder is a man aged 35-44 from the North East.

On the other hand, the typical person without a policy is a woman under 25 years old from the East Midlands.

Amongst the respondents, it was actually found that most people took out life insurance around the age of 32. The average age for women was 31.66 and for men 32.28 – a strikingly similar statistic.
Women marginally valued savings more than a pension, while the opposite was true for men, but the gender split between life insurance policy holders was almost even.

The Reasons for Taking out Life Insurance

Women are more likely to take out a cover due to responsibilities like children and a mortgage. The responses from the male participants suggested that their motivation for life insurance was general health and well-being, along with those who were required to take out life cover as part of their occupation.

Age Groups

There is a noticeable difference in the amount of cover we receive across different age groups in the UK. The following graph represents that fluctuation:

The older we get, the more disgruntled we become with levels of pay. We are more satisfied at a younger age with pay rises, with nearly 18% of 18-24-year-olds saying their wages had increased sufficiently to cover the cost of living. However, only 4% of those of us aged between 45 and 54 were happy with increases in pay.

As the graph below illustrates, gadget insurance becomes less important to us once we reach our late twenties, when funeral insurance replaces it in order of priority. Moreover, having a pension takes on more significance the older we get, being the top priority for those aged 55 and over.

50% of those aged 35-44 have life insurance, compared to just 15% of 18-24-year-olds.

72.5% of people aged 18-24 who have cancelled an insurance product have done so because it was too expensive.

At 21% – more than any other age group – over 55s are most likely to cancel an insurance product because of a loss in faith in their insurance provider.

Region by Region

People in the West Midlands are more attached to their cars and mobile phones and were found to be the most reluctant to cut back on such luxuries in the current economic climate.

Only a quarter of people from the East Midlands would be willing to cut back on their gym membership if they had to make cutbacks – they would sooner give up restaurant meals (77%) and holidays (52%).

People in Yorkshire are the least likely to give up television, with only 27% willing to cancel a subscription. Conversely, almost half of the people in Wales (45%) would cut out such a luxury.
Less than 8% of people from the North East would consider cancelling an insurance policy if they were struggling financially, compared to almost a fifth (18%) in the South East.

An interesting statistic arose in the Midlands with regards to wages, with people in the West being the happiest with their increase in pay and, strangely, people in the East being the most disgruntled.

Life insurance policies are most common in the North East and least common in the East Midlands, with over 51% of people from the latter stating that they don’t feel they need it.

Nearly 32% of people from Yorkshire without life insurance haven’t taken out a policy because they don’t understand it and, similarly to the East Midlands, 51% think they don’t need it.

People in Scotland wait the longest to take out a life insurance policy, meaning that their premiums could be higher as a result. In comparison, the Welsh cover their family from the earliest age, being the only people in the UK to take out life insurance at an average age of below 30.

Download survey results

Survey conducted by LifeInsurance.org.uk in collaboration with One Poll with a sample of 1,000.