Uncertainty around Brexit is making a significant dent in employee confidence, with a huge spike in queries about income protection and redundancy cover.
ActiveQuote has seen an 85% increase in income protection insurance enquiries in the last year, with the impact of Brexit on the UK economy believed to be a factor. The highest rise in enquiries comes from customers aged between 25 and 34, while the proportion of queries from men has also grown year on year.
With concerns about the UK unemployment rate and post-Brexit job opportunities, it seems employees are realising the need for a financial safety net ahead of the country’s withdrawal from the European Union on March 29.
Since the 2016 referendum vote to leave the EU and in the absence of a withdrawal agreement in place with just over a month to go, several sectors have faced uncertainty and job losses. Recent Labour Market Outlook statistics showing that employment growth prospects have fallen in the manufacturing and public administration and defence sectors, while Jaguar Land Rover and Ford have announced plans to cut 2,000 jobs in the UK.
Honda has also announced it’s to close its Swindon car plant in 2021 with the loss of around 3,500 jobs - although the manufacturer has said the move is due to global changes in the car industry and is not connected with Brexit.
What is redundancy insurance?
Redundancy insurance is a type of income protection cover that helps meet the bills should you be made redundant involuntarily. Also known as unemployment insurance, it can be used to pay outgoings such as your mortgage or rent, utilities bills or household expenses until you start a new job.
According to recent Office for National Statistics figures, 3.3 people in every 1,000 employees were made redundant between October and December 2018 - yet millions of UK adults would not be financially resilient if they suffered a shock to their income.
Redundancy cover provides monthly payments for up to 12 months following involuntary unemployment. There is usually a ‘wait’ period - often 30 days - until you receive the first sum, but, with some policies, payments will be backdated to day one of your redundancy.
ActiveQuote head of partnerships Rod Jones said: “With the current uncertainty around Brexit, ActiveQuote.com has seen an 85% increase in income protection enquiries last month, when compared to January 2018. Given this increase, it’s clear to see more and more people are looking to protect their finances in the event of sickness, accident or unemployment.”