Young homeowners vulnerable

A new study has found nearly a third of young UK mortgage holders have no protection cover, leaving them financially vulnerable if their income suddenly stops. The research surveyed more than 1,200 homeowners aged 18 to 34, including 500 with mortgages. Among those surveyed, only 15% of young homeowners said they knew a lot about income protection and just one in three had life insurance or critical illness cover.

Short-term fixes, long-term risks

When asked how they would cope with a sudden loss of income, 14% said they would immediately struggle to meet their mortgage payments if they lost their income. A further 57% said they would face financial difficulty within six months. To make up for the income shortfall, 29% of respondents said they would try to take on extra work. Others would cut savings or pension contributions (23%), apply for government support like Universal Credit (21%), or consider a bank loan (12%).

The report warns these are short-term solutions that could lead to greater financial strain later on. The younger generation is particularly exposed to more job uncertainty and cost-of-living pressures, making long-term planning all the more essential.

High stakes for first-time buyers

Paula Higgins, CEO of HomeOwners Alliance, expressed her concerns, highlighting the specific risks faced by younger buyers, “We need to do more to support young people in staying financially secure, especially as they take on the long-term responsibility of a mortgage. Ensuring they have the tools, knowledge, and support to weather life’s ups and downs is essential to helping them hold onto their homes and build a stable future.”

A growing awareness – but not across all products

While the findings point to an urgent need for education and better access to protection, there are signs that awareness is starting to improve. Separate research from Swiss Re reveals income protection sales have increased by 18% year-on-year. However, sales of other types of cover, including life insurance and critical illness, have declined.

The message is clear – there’s an urgent need to close this awareness gap. That means clearer advice, better signposting and conversations about protection starting earlier – so that young homeowners aren’t left exposed.

Don’t wait for a crisis to realise what’s missing. Speak to us today about protection insurance – because securing your income means safeguarding your home, your future and your peace of mind.

Mortgage debt squeeze tightens

The number of UK homeowners with more than £300,000 left to repay on their mortgage has nearly doubled in the past seven years, highlighting the growing financial strain many are facing, amid high property prices and rising interest rates.

New analysis of the Financial Conduct Authority’s (FCA) Financial Lives Survey reveals that 9% of mortgage holders now owe over £300,000 – up from just 5% in 2017. In areas with the highest house prices, such as London and the South East, the proportion jumps significantly. Today, 28% of homeowners in these regions owe over £300,000, compared with 17% seven years ago.

The analysis reveals a growing trend of homeowners taking on substantial mortgage debt, while household incomes have failed to keep up with rising property prices. In addition, the recent surge in mortgage costs has intensified financial pressure – especially in regions where borrowing was already high.

Stretching affordability

Most lenders cap borrowing at around four-and-a-half times a borrower’s annual income. But the data shows that one in seven homeowners now hold mortgage debt worth at least four times their income – a notable increase from 11% in 2017. Although this is down slightly from the 2020 and 2022 peak of 16%, it suggests many homeowners have little headroom left.

The figures present a concerning picture, especially considering how many borrowers still neglect to shop around for more competitive mortgage deals. Even modest reductions in interest rates can lead to significant long-term savings over the course of a mortgage.

Wider signs of financial strain

The FCA survey paints a broader picture of financial vulnerability across the UK. One in 10 people reported having no savings at all. Almost a quarter of respondents were classed as having low financial resilience.

Sarah Pritchard, Executive Director of Consumers and Competition at the FCA, acknowledged the pressures many households are facing. “FCA data shows that finances are stretched for many,” she said. “But there are improvements – more people with current accounts and less digital exclusion. Our strategy will build on this to help people better navigate their financial lives.”

Looking ahead

With mortgage debt levels rising and many homeowners close to their borrowing limits, it’s vital to review your finances regularly and seek professional advice to avoid long-term financial strain.

Your home may be repossessed if you do not keep up repayments on your mortgage. As with all insurance policies, conditions and exclusions will apply