Buying a home is one of life’s major milestones, but it usually comes with a six-figure mortgage attached. For most people, keeping up with those monthly repayments depends entirely on a steady income. Yet few stop to consider what would happen if illness, injury or worse suddenly brought that income to a halt.
This is where life insurance and mortgage protection become essential. It is not simply a financial formality; it is about safeguarding your family’s home and future. However, the data paints a very different picture of what homeowners should have in place and what they actually do.
This report draws on the latest UK statistics from the Association of British Insurers (ABI), Which? and the HomeOwners Alliance. It aims to present a clear, evidence-based picture of how well protected UK mortgage holders really are in 2026.
The Protection Gap Among UK Mortgage Holders
According to the April 2025 “Bricks But No Backup” report by the HomeOwners Alliance (HOA) and LifeSearch, more than a third (36%) of UK mortgage holders have no life insurance, income protection, or critical illness cover in place
The risks aren’t abstract. That same 2025 HOA and LifeSearch study found that 21% of borrowers would face financial difficulty within just two months of losing their income. With mortgage payments due every month, the risk of arrears can build quickly without a financial safety net.
The level of underinsurance is equally concerning. Royal London’s protection research in 2024 found that 8 in 10 homeowners paying a monthly mortgage do not have income protection in place, which is the most direct way to replace lost earnings. The same research also found that two-thirds have no critical illness cover. This leaves many households financially vulnerable if they were unable to work because of a longer-term illness.
This report concludes that with 80% of mortgage holders unprotected, a vast number of UK homeowners are effectively walking a ‘financial high wire’ by relying entirely on their current income. Collectively, these figures highlight the UK’s growing protection gap, underlining how financially exposed many households remain.
Young Homeowners: The Most Exposed Group
Younger mortgage holders are among the most financially exposed. Around 30% of homeowners aged 18 to 34 have no life insurance or other protection in place, according to a OneFamily Family and Finance Report. This lack of cover is especially risky for a generation already under pressure from student loans, childcare costs and the rising cost of living.
The HomeOwners Alliance reports that younger buyers often underestimate how likely it is that something could go wrong. Many see protection as something to think about later in life, when they are older, earning more or believe it will be cheaper to buy.
In reality, the opposite is true. Life cover is often most affordable when people are younger and in good health. A healthy 28-year-old, for instance, could secure a policy for the cost of a weekly takeaway coffee. Yet many still go without, leaving younger households, who often have fewer financial buffers to fall back on, at the greatest risk if their main source of income disappears.
Life Insurance Shortfall for Families
Even among those who already have life cover, the question remains: is it enough? Research from Which?, published through Infinity Financial Advice, found that so-called “dependant families” face an average protection shortfall of £90,000. This figure represents the gap between what existing insurance would pay and what is needed to clear the mortgage and maintain living costs.
For families with children, the shortfall is even greater. Homeowners with dependants are estimated to face a gap of £194,200, even when they already have some life insurance in place. For a surviving partner, this could mean facing the difficult reality of selling the family home or taking on additional debt at a time of emotional strain.
Which?, widely known as the UK’s consumer champion, has repeatedly warned that many families underestimate the amount of life insurance they actually need. The cover should not only pay off the mortgage but also account for childcare, education, daily bills, and the general cost of living. With the right mortgage life cover, families can avoid this financial pressure and retain the stability they need most.
Why Don’t Homeowners Have Cover?
Given the risks, it’s natural to ask why so many homeowners remain unprotected. Much of the answer lies in persistent misconceptions. One of the most common myths is that insurers rarely pay out, but this is far from true. According to the Association of British Insurers (ABI) May 2025 report, 97.9% of life insurance claims were paid in 2024.
Another barrier is cost, although the perception often differs from reality. Research by Reassured, based on 2024/2025 market data from more than 120,000 policies, shows that the typical UK life insurance premium is around £32 per month. For many households, that is equivalent to a family takeaway or a couple of streaming subscriptions.
There are encouraging signs that attitudes are shifting. According to Mortgage Solutions, the number of borrowers inquiring about protection doubled between 2023 and 2024, rising from 11% to 21%. While still a minority, it shows that more homeowners are beginning to recognise the important role that life cover can play in long-term mortgage planning.
Trends and Future Outlook
Economic pressures in recent years have made it harder for many households to balance essential bills with longer-term financial planning. In difficult financial times, life and income protection can appear discretionary, even though it is often the most important safeguard a household can have.
There are, however, signs of progress. Brokers report that more clients are initiating conversations about protection themselves, especially younger homeowners. In recent years, many brokers have reported growing interest in income and health protection, even if this does not always result in a policy being taken out.
Digital-first protection products have also made it easier for homeowners to compare options and apply for cover. Online platforms and simplified application processes are making it quicker and easier for homeowners to obtain cover. With more product options now available, from decreasing term policies that align with mortgage balances to hybrid critical illness plans, access to protection is steadily improving.
Even so, the overall protection gap remains a concern. According to the April 2025 HOA report, there are still 2.34 million mortgage holders living without any form of life insurance or income protection. This figure makes it clear that awareness does not always result in action. While the outlook is cautiously optimistic, but much more needs to be done to ensure that financial protection becomes as fundamental to homeownership as the mortgage itself.
Closing the Protection Gap
The evidence is clear: millions of UK mortgage borrowers remain financially at risk. More than two million have no protection at all, the youngest homeowners are the least insured, and families with children face an average life cover shortfall of around £194,000. The UK’s protection gap is real, and it continues to leave households exposed to sudden income loss.
The good news is that life insurance is more affordable and reliable than many people think. Around 97.9% of life insurance claims were paid in 2024, and the average premium stands at roughly £32 per month. That level of protection is within reach for most households and can make the difference between keeping the family home and losing it.
At Mortgaged, we view life cover as an essential part of every mortgage plan, not an optional extra. Our team can help you compare policies, tailor coverage to your circumstances, and secure peace of mind that your home and loved ones are fully protected, whatever life brings.
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