Our research shows the average private renter is just three days from the ‘breadline’ compared to 23 days for the average mortgage holder.

The picture we have uncovered in our latest ‘Deadline to Breadline’ report is particularly challenging for private renters but also tough for mortgage holders. This research, which we have produced since 2013, assesses the financial stability of people across the UK by analysing how long people believe they could survive financially if they lost their income – the breadline.

This year’s survey of more than 2,700 adults revealed that the average mortgage household would be 90 days from the breadline if it lost its income. While this doesn’t sound too bad at first glance, once factors such as savings and debt are taken into account it becomes clear that the average person could only last for 24 days, a difference of 66 days. Renters’ calculations were even more inaccurate — they thought they could last for 30 days, but in reality their deadline was a mere three days!

This is the kind of perception gap our research is trying to expose, along with busting some of the biggest myths and misconceptions to help improve financial planning and ensure people can keep a roof over their heads. The Covid-19 pandemic hasn’t helped, of course, and it’s set to test many people’s financial resilience even further.

So how different are they?

For mortgage advisers, an important finding is that while renters may be almost on par with homeowners in terms of what they can save each month, renters are much more in need of income protection as they don’t have the security of their own home.

They do have less debt, but equally they tend to have less savings than mortgage holders on average and would reach the breadline 20 days faster. Yet mortgage holders are seven times more likely to protect their income than renters, with only 2 per cent of renters having an income protection policy compared to 14 per cent of those with a mortgage.

One of the biggest myths the research uncovers is that just one in 10 people see themselves as their biggest asset, despite the fact that the single biggest asset for most of us is our ability to earn an income. The value of our income over our working life far outstrips the value of our house, car or savings, yet our findings show people are four times more likely to insure their pet and six times more likely to insure their home than their income.

Although more people with mortgages have income protection than their rental counterparts, only 6 per cent of them considered themselves as their biggest asset. And, while 17 per cent of renters thought they were their biggest asset, a woeful 2 per cent have decided to protect their income.

Is this because they have taken the conscious decision not to take out income protection, or is it because they haven’t had the opportunity to discuss the risks with a financial adviser?

With this in mind, the report by the Association of Mortgage Intermediaries released in November suggests there is interest in mortgage brokers protecting renters. When asked ‘How interested would you be in writing income protection for renters via an estate agent?’, 55 per cent expressed an interest. It appears to be a very underserved market and one which is desperately in need of focus.

This year’s ‘Deadline to Breadline’ report shows how vulnerable the UK consumer is to losing their income and, with ill health and unemployment also a risk, advisers can play a valuable role to raise awareness and educate clients from a range of different financial circumstances.

Income protection cannot help with unemployment, but a more sturdy and holistic ‘Plan B’ which is based on protection, savings and greater awareness could help provide much of the support people need.

Our big message is that renters need to be protected and there is a market out there for advisers to address. Getting this right will benefit advisers because those renters will hopefully one day become mortgage holders and it will also benefit wider society as it means an underserved market will be better protected.

Richard Kateley, head of intermediary development, Legal & General