HomeOwners Alliance: plugging gaps in financial understanding
HomeOwners Alliance: plugging gaps in financial understanding
Many homeowners have little idea how exposed they are financially if illness or injury stops them working. New research from the HomeOwners Alliance lays out the gaps.
One of the main sources of focus, and therefore worry and stress, in buying a home is the financial side of things.
How much will the whole process cost? What about everything else eyeing up your wallet beyond the purchase price: legal fees, surveyors, stamp duty, removals? And can you actually afford to buy in the first place?
These are all important questions. But what about life after completion day: the cost of maintenance, insurance, mortgage repayments, utilities and the rest of the seemingly endless list? And what would happen if your income became limited or disappeared entirely as a result of unforeseen circumstances such as illness or injury?
It is hardly surprising that buying a home is considered one of the top causes of major stress in anyone’s lifetime, usually positioned after bereavement and getting married.
The HOA and LifeSearch research
The HomeOwners Alliance (HOA) has published the results of research carried out in partnership with income protection specialist LifeSearch, which has revealed large gaps in financial understanding among participants. Many had little or no understanding of the financial impact on their household, or their ability to cope, should they be forced to stop working because of illness or injury.
HOA and LifeSearch identified five key areas of common misunderstanding around income protection:
Mental health coverage – There is a widely held belief that income protection policies will not cover loss of income related to mental health issues. Only a quarter of respondents acknowledged that such policies do cover it, with a similar number believing they do not. In reality, mental illness is a primary cause of income loss and is almost certainly covered by any income protection policy.
Self-employed eligibility – The research highlights a continuing misconception that those who are self-employed are not eligible for income protection, since their income is neither certain nor continuous. 16% of respondents believed this to be the case, with another 38% unsure. This is particularly significant given that there are some 4.3 million people registered as self-employed across the country.
Losing a second income – 18% of respondents believed income protection need only cover the principal income from the main earner. That uncertainty is higher among younger households and those with children. As HOA points out, many households rely on two incomes to cover everyday bills, so income protection is as relevant for any earner in the home, not just the main breadwinner.
Everyday illnesses over life-changing events – More than a third (36%) believe income protection only covers permanent or life-changing conditions. In fact it can cover debilitating but less severe illnesses, mental health conditions and minor injuries. The risk is that this misconception leads people not to claim, or not to take out a policy at all.
One-time use – Over a fifth (22%) of respondents think income protection can only be used once. Most policies allow multiple claims (check the terms and conditions), but this myth may discourage people from claiming when they are perfectly entitled to do so.
What the research found
Debbie Kennedy, CEO of LifeSearch, said:
“Most people rely on their income to keep the household running — the mortgages, the bills, everyday life — without always knowing how limited the safety net would be if illness or injury stopped them working.
Income protection is designed to fill that gap.
It covers mental health conditions, everyday injuries, time off for surgery, and it’s available to the self-employed.
Yet this research shows that millions of homeowners — including people who already own a policy — don’t know that.
That’s why good advice from a specialist adviser is so valuable — not just when you take out cover, but as your life and circumstances change — it’s the difference between a policy that truly protects you and one that sits in a drawer, misunderstood, until it’s too late.”
Paula Higgins, CEO of the HOA, added:
“These findings reveal a clear gap between perception and reality when it comes to income protection.
Many homeowners wrongly believe it won’t cover mental health, isn’t available to the self-employed, or only pays out for serious conditions — leaving them more financially exposed than they realise.
At a time when more people are self-employed and households depend on two incomes, these misconceptions matter.
Income protection can provide vital support if illness or injury stops you working, yet too many people either misunderstand it or overlook it entirely.
There’s a real need to improve awareness so people understand what cover is available before it’s too late.”
What this means if you are buying a home
It is easy to assume income protection does not apply to your situation because of your work status, age or health history. But it is worth considering when buying a property: how would you cope if one or more earners in your household were suddenly unable to work and the money stopped coming in?
Buying a home is a significant financial commitment, and getting professional advice at every step matters, including on the legal side. A good conveyancing solicitor will keep your transaction moving efficiently and without unnecessary cost.
At Best Value Conveyancing, we offer fixed-price quotes with standard disbursements set out clearly upfront, and a no completion, no fee guarantee should your sale or purchase fall through. Call us on 0800 0387 007 (free from mobiles) or get a quote online to get started.
