A quarter (25%) of the UK workforce have taken out pet insurance yet only 7% are protecting their income with self-employed people being particularly vulnerable to financial risks, research has found.
The Drewberry Protection Survey 2015 polled 1,820 employed and self-employed workers in the UK during January 2015. It found that 26% of people surveyed do not have income protection because they believe their sick pay is sufficient.
However, 1 in 20 had been off work for over 12 months (and 1 in 13 for over six months), yet only 3% receive over 12 months in sick pay (and 14% over six months), while 24% receive no sick pay at all.
Meanwhile, the research described self-employed individuals as being "at significant financial risk."
Almost half (49%) of self-employed people have three months or less in savings, with 28% having less than a month. Yet, despite having no sick pay and very limited savings only 5% have income protection.
However, 2.6 times as many company directors (13%) have income protection, possibly because they experience it as an employee benefit and have more disposable income to pay for it, Drewberry said.
A third (34%) of company directors rated income protection as the most important protection insurance, followed by life insurance at 21%.
This is compared to only 17% of employed people, where life insurance is seen as the most important (41% of respondents).
Meanwhile, 22% of respondents said they trusted banks compared to only 19% for insurers. A fifth (20%) said financial advisers were the most trustworthy with comparison sites last with 15%. The most popular answer was ‘none of the above' at 24%.
Among those surveyed, 81% of insurers named Aviva are the most recognised insurance brand with 72% naming L&G as the second most recognised brand.
Despite a large amount of advertising, only 5% of respondents reported recognising Beagle Street. This probably highlights the length of time and capital it requires to create a mainstream insurance brand, Drewberry said.
Tom Conner, director at Drewberry, said: "The survey has highlighted just how financially vulnerable the UK workforce is to ill health and disability, especially the self-employed. Clearly if you have limited employer sick pay and savings and no insurance a family would need to rely on benefits, which are only a very basic safety net.
"Unless a family has other income streams to help them they will need to dramatically slash their expenditure. That could mean taking drastic action to reduce debts such as selling the house to reduce the mortgage.
"The best type of insurance to protect workers financially is Income Protection, yet only 7% of people surveyed have an Income Protection policy, despite 25% buying pet insurance. This is especially surprising given the cost of income protection and pet insurance are fairly comparable."
This is the second year Drewberry conducted the survey into consumer attitudes with previous research launched in 2013.