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&#3995% are not protecting income&#39

Around 95 per cent of the working population are not sufficiently covering their income against the effects of being off work, according to Scottish Equitable Protect.

It is calling on IFAs to look more closely at the lifestyles of their clients to make sure they have adequate cover to protect them in the event of absence from work due to long term sickness.

Research from ScotEq found the average family expenditure is £2,154 with mortgage repayments accounting for less than 33 per cent of this, which ScotEq says shows people need to think about protecting a lot more than just their mortgages.

ScotEq found people have significant other monthly outgoings that are not being covered such as £524 to run an average family car, £94 on utilities and £113 on credit card or personal loan repayments. Saving for an annual holiday can amount to £37 a month and gym membership at £44 a month.

It says IFAs should be talking to their clients about the need to cover a greater proportion of their income beyond mortgage payment protection.

ScotEq says that as personal borrowing increases, people need to think about protecting their income to meet their financial commitments against long-term illness. It offers IFAs a menu-based range of income protection products that can tailored over time to cover income and expenditure changes.

Head of marketing Heather Armstrong says: “Today&#39s direct-debit lifestyles mean several important areas of family life may be at risk if a key source of income disappears.

“Mortgage payments typically account for only a third of families&#39 average monthly outgoings, so income protection cover may be more appropriate than simply mortgage payment protection.”

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