You Don't Need to Own Your Home to Want to Protect It

By Jo Wilkie

Our surroundings are important to us. Having a secure, stable environment that you can call your home reduces stress levels, makes you feel in control of your life and gives you a place where you feel truly able to be yourself. Home is where the heart is.

What this home looks like has shifted dramatically over the course of this century. “Generation rent” is growing rapidly. The number of households renting has more than doubled since 2001 [1]. Having somewhere that feels like “home” now doesn’t necessarily mean you own it.

For more and more people owning their home is becoming a distant dream. The average age of first-time buyers has risen to a record high of 33.4 years of age and the average deposit needed to buy that first home is now £61,000 [2], more than double the average UK wage of £28,000 [3]. If you don’t want to, or can’t stay at home with your parents, renting is the only option open.

Your home is no less important because it is rented. Arguably, it takes on an even greater significance, as for renters, there is no option to sell if they get into financial difficulty. If they can’t pay the rent, their home really is at risk. So why do so few renters have protection to fall back on if they can’t work due to illness or injury?

There are lots of subjects that people prefer not to talk about. Health and finances come pretty close to the top of the list. Thinking about money troubles or ill health is not pleasant, which makes talking about income protection a conversation that very few people want to have.

The exception to this has been around major life events - getting married, starting a family, and especially buying a home. Financial advisers have recognised and reacted to this, making protection part of the conversation linked to mortgages. Providers and brokers are there to talk buyers through the options available, making them aware of the risks and the benefits of having income protection.

These conversations rarely happen for renters. While many of them are paying a huge amount of their monthly wage on their accommodation costs, (almost a quarter who privately rent in the UK pay more than 40% of their salary [4]), they are often unaware about the financial protection that is available. For these people, the consequences of not being able to work for even a few months could be catastrophic. Having some kind of affordable protection is not only likely to be appealing but also potentially life changing, if only they knew about it.

Despite house prices falling over the past few months, the drop has been minimal and unlikely to help many first-time buyers get on to the housing ladder. The chronic shortage of housing means demand remains high. Hundreds of thousands of additional properties need to be built to change the situation. This will not happen overnight.

This means the number of renters will increase over the next few years at least, particularly amongst Gen Z. This generation is very aware of the risks associated with illness. The pandemic brought home to them that anyone, no matter their age or fitness level, can contract a serious illness that prevents them from working.

They are also all to aware of how much they will need to save to be able to buy their home one day. Their income is important to them and the concept of protecting it appeals to them. This was underlined in the latest Association of Mortgage Intermediaries (AMI) Viewpoint survey, where 78% of Gen Z respondents said they thought it was important to have protection, higher than for any other generation [5].

The conditions are right to widen the conversation around protection, the industry needs to be bold enough to find a way to have them when and where people need them. It’s time to think differently about what a protection customer looks like and what the triggers are for buying. As the number of people calling rented property their homes grows, we need to reach our and help them protect their sanctuary.

[1] Number of households renting has more than doubled since 2001, census reveals | UK news | The Guardian

[2] First-time Buyer Statistics and Facts: 2023 | money.co.uk

[3] Average UK Salary By Age in 2024 - Forbes Advisor UK

[4] Five charts explaining the state of the UK’s rental sector | Housing | The Guardian

[5] AMI Viewpoint Survey 2023, The Perception Gap