The majority of homeowners who hold an income protection policy wrongly believe it will pay out in the event of redundancy, new research has shown.

A survey by LifeSearch and HomeOwners Alliance found that 47% of homeowners who do not have a policy incorrectly hold this belief, but this rises to 61% among those who have actually taken out the cover.

However, income protection is designed to cover sickness or injury rather than job loss, meaning many homeowners who try to make a claim in the future could be left exposed.

The study also found that one in five homeowners believe that state support would be sufficient if they were unable to work – despite the fact it might leave them unable to afford their mortgage.

Statutory Sick Pay (SSP), the primary state support available to employees who cannot work due to illness, currently stands at around £500 a month.

For most borrowers, that falls far short of what’s needed to cover monthly repayments and essential bills.

For the self-employed, there is no entitlement to SSP at all.

More than one in five (21%) homeowners believe that if their employer provides occupational or enhanced sick pay, they have no need for income protection.

But while enhanced sick pay and group income protection can provide short‑term support, it is at the employer’s discretion, limited in duration, and does not move with you if you change jobs.

This means many workers lose that safety net when they move roles.

LifeSearch chief executive Debbie Kennedy says: “Too many homeowners think they’ve got a safety net in place, when in reality, they’re relying on assumptions that don’t hold up – whether that’s expecting support if they lose their job, or overestimating what sick pay will cover.

“What we see every day is that the gaps aren’t complicated – they’re about clarity.

“A good adviser helps people understand how everything fits together, from state support to workplace benefits and what happens if those change or disappear when they move jobs.

“No one should be finding out how limited that support really is at the point they need it.’

HomeOwners Alliance chief executive Paula Higgins says: “Homeowners work hard to buy their homes, but too many may be relying on assumptions about financial support that do not match reality.

“A mortgage is usually a household’s biggest monthly commitment, yet this research shows widespread confusion about what state support, employer sick pay and income protection actually cover.

“The most worrying finding is that nearly half of homeowners wrongly think income protection would pay out if they were made redundant.

“That misunderstanding could leave families badly exposed at the worst possible moment.

“Homeowners need clear, practical advice so they understand what protection they have, where the gaps are, and how they would keep paying the mortgage if illness or injury stopped them working.”