You may be able to handle all your secured debts without any risk of defaulting but would your family be able to cope with the debt responsibility without your income?

The average household with dependent children has £91,648 still outstanding on their mortgage now compared to £88,500 last year, according to Scottish Widows. And when it comes to short term debt, the average household with dependent children has carried over £8,653 over the last three months.

These debts may not be huge and are certainly manageable with a good income, but what happens if you get sick for a long time? Or what happens if you are involved in an accident, need surgery or have to care for a sick family member? What happens if you die? Could your family take on the long and short term debt alone?

Millions of households are leaving themselves at risk of being unable to survive financially if one of the bread winners become unable to work – but Scottish Widows says 62% of Brits have not protected themselves for the long term should the worst happen and they lose their household’s main income.

Clive Allison, protection director at Scottish Widows, says: “Nearly half of families with dependent children now rely on two incomes to maintain a decent standard of living, and as our stats show, this isn’t likely to ease off any time soon. For many families, sacrificing half their income when they have children is a luxury they just can’t afford.

“People are leaving themselves exposed to a lack of income should anything happen to the main breadwinner, and large personal debt to repay on top of this could make things even more difficult. Families need to make sure they protect themselves financially so if they do get into difficulties they have the vital back up in place to look after their families and loved ones.”

SOURCE: Scottish Widows, 18/01/10

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