More than half of British adults believe the Government will cut state benefits over the next five years, research from Lincoln Financial Group reveals.
The survey shows considerable confusion about the support people believe they will receive from the state if they cannot work.
Research shows 54% of adults around 24.8m people – believe benefits will be decreased with the figure rising to 74% of 25 to 34-year-olds and 70% of 35 to 44-year-olds. In contrast just 36% of those aged 65 and over and 34% of 55 to 64-year-olds believe benefits will be cut.
However along with the hugely different attitudes from different age ranges the study reveals people are confused about exactly who is responsible for looking after them financially if they cannot work. And there is a deep divide about whether the levels of State protection are higher now than they were 20 years ago.
Around 51% of people believe the State does less to protect us financially now than 20 years ago while 42% believe it does more.
Despite the concern about the level of financial protection offered by the Government the UK still faces a 2.4 trillion gap, according to insurer Swiss Re, in the amount of protection insurance cover we need and the amount we actually have.
Ian Noble, head of strategic partnerships at Lincoln Financial Group, says: Increasingly people are realising that the Government cannot provide for them financially if they cannot work. And the fear is that the amount of support will be decreased.
The onus is on us to take action to protect ourselves in the event of being unable to work either through losing our job or not being well enough to work. However the evidence is that while we have realised the Government will not be able to support us we have not quite made the connection that we need to take action ourselves.
At Lincoln we strongly advise people to take financial advice to make sure they have sufficient life insurance and other protection insurance such as income protection and critical illness in place to ensure that we can survive if the worst happens. It neednt be prohibitively expensive and should be considered seriously by everyone.
The protection gap however is a reality and it is growing. We need to take action and think about what we would do if we could not earn an income.
Research shows around 51% believe it is the Governments responsibility to ensure we are provided for if we cannot work while 38% accept that it is their own responsibility. Another seven per cent will rely on their families if the worst happens.
Not all people have given up on the Government however. Around 38% believe State benefits will be increased over the next five years. And more people aged 55 and over believe benefits will increase than those who believe they will be cut.
Noble adds: “Lincoln Financial offers a wide range of protection cover as part of its Financial Foundations product which is a specialist multi-benefit protection product, providing whole of life cover in one place under one wrapper including income protection and critical illness.
“It allows Independent Financial Advisers to provide their clients with a flexible approach to protection planning; clients can add or remove from the product menu, amounts can be increased or decreased at any time with no additional charge, premiums can be set up on a minimum or a standard basis, and cover plans can be pre-funded or targeted to last for a specific term.
“The product menu plan consists of life cover, critical illness cover, permanent disability cover, elderly care cover, income protection cover and waiver of premium. Financial Foundations can also offer clients an inheritance tax planning solution. It includes cover for home makers as well as those in paid employment.”