The proportion of households which in the event of losing their income from sickness or unemployment would rely on income protection have fallen by a quarter to 9% in two years, according to research.
The HSBC survey of 2000 people also found that 24% of households have savings, 9% have savings of £250 or less and 44% have £2,000 or less.
The age-group most at risk was 18-24 year olds, who on average would survive three days on £250.
The most popular option for replacing lost income was reliance of savings, which had remained static as the plan for 36% of households.
Also static was the use of a credit card, loan or overdraft to cover outgoings, which 17% would use if they lost their income.
There was also a fall in households expecting to claim benefits with 26% planning to cover their outgoings with the state's help compared to 29% in 2013.
Debbie Thomas, head of savings at HSBC, said: "As 91% of the population does not have their income protected by an insurance product, making sure you have a sufficient financial safety net is crucial.
"This cuts the risk of running into financial trouble should you lose your job or be unable to work, and means you don't have to resort to methods that could leave you in debt. As a general rule, a minimum of three months' salary makes for a solid financial backup."
Andrew Jenkinson, director at Drewberry, said: "Our 2015 consumer survey showed that consumers are horribly underprepared for the financial impact of illness.
"It is very concerning that although our survey showed 50% of respondents did not have significant savings or sick pay in place the level of individuals who are adequately protecting themselves is dropping further.
"It is an issue we as an industry need to address with some vigour."
