A third of families have no financial safety net - L&G

The provider's poll of 2,478 consumers found just 12% of British households have an income protection policy in place.

Meanwhile, nearly half (48%) were lacking any type of protection insurance.

Half of 18-24 year olds revealed they have no financial safety net while just 28% of older respondents said they had no strategy in place to deal with financial hardship.

Meanwhile almost two thirds of households (60%) did not expect to receive any financial support from family or friends, while those that did expected just £155 in monthly support from their support networks. This is just enough to cover 10.9% of essential spending.

For those that do have a financial strategy, saving is the most common approach - 41% of households identified this as their strategy.

However, the average family has just £660 in savings, and higher living costs mean that this is an increasingly difficult option for many.

Duncan Finch, executive managing director at Legal & General Insurance, said: "British families remain in a financially precarious situation despite signs of recovery in the UK economy. Daily financial pressures mean that many households are unable to put enough money aside as a safety net.

"In addition 60% of households are unable to rely on either family or friends for financial support and changes to the welfare system will reduce the ability of the state to assist in a financial catastrophe. Clearly there are some worrying gaps when it comes to UK consumers planning their personal finances."

Finch said cutting back on saving and protection insurance may save money to meet bills in the short term but would not be viable long-term.

He added: "Encouragingly, our research shows that 31% of households do indeed have critical illness or life insurance cover. However, it's crucial that those families without protection have a comprehensive financial strategy so they are well placed to deal with financial hardship."