Vulnerability Index shows protection needs shoring up – Genworth Financial

Insurer Genworth Financial has warned consumers risk debt problems and lowered standards of living due to inadequate protection levels.

One in five households are now classed as financially vulnerable, the fourth Genworth vulnerability index has found.

People under 30 and those with families have been increasingly financially vulnerable over the last four years. The proportion of vulnerable households has increased on average every year, with 20% of respondents in 2010 falling into this category, compared to 8% in 2007.

In addition, a regional split has emerged, with those in the south feeling worse off than in the north.

Peter Barrett, senior vice president of lifestyle protection at Genworth Financial, commented: "With increasing government austerity measures and less welfare to fall back on, consumers should ensure they have adequate protection in place now to safeguard against what could potentially be a rocky road ahead.

"Feelings of financial vulnerability amongst consumers reflect concern about their ability to keep up with repayments on their unsecured borrowing and mortgages. Over-indebted households also cannot access sustainable borrowing or draw on savings."

This is the fourth edition of "The Genworth Index" that tracks consumer financial vulnerability in 18 countries (14 European, the US, Canada, Mexico and Australia) in a survey of nearly 14,000 households.

Overall, levels of financial vulnerability in Great Britain are back up to 2008 levels, after temporary relief in 2009. Levels are much higher than those observed in 2007 and look far from set to return to those levels.

Greece was named the most vulnerable country, with Portugal second; but Italy, Spain and Germany are not far behind. Whilst Great Britain ranks around the middle of the table, overall the balance is tipped towards financial vulnerability rather than security.

The UK comes out worse than other English speaking countries- Canada, Australia and even the USA. Nordics (Sweden, Denmark, Norway) are much healthier than southern Europe (Greece, Portugal, Spain).