New study uncovers financial vulnerability in five million UK households

Delayed life milestones and lack of planning pose significant risks

New research has revealed that five million childless households in the UK currently lack life insurance, pensions or savings[1]. This alarming statistic underscores a broader shift in how families are structured and how financial priorities are set across the nation.

Traditionally, significant life events such as marriage, parenthood and homeownership have catalysed individuals to take serious steps in securing their financial futures.

However, with many now opting to delay these milestones, the conventional triggers for financial planning are also being postponed. This delay is having tangible consequences on the overall financial wellbeing of these households, making them more vulnerable to unexpected financial hardships.

Key financial safeguards

The evolving dynamics of family life are causing a paradigm shift in financial engagement. For instance, it’s becoming increasingly common for individuals to prioritise career advancement or personal freedom over settling down early. While this shift allows for greater personal and professional development, it also means that key financial safeguards such as life insurance and pension plans are often not put in place until much later in life, if at all. This lack of early financial planning leaves many without a safety net, as the research shows.
The delay in securing financial products that were once considered essential is not just a personal risk but a societal one, potentially leading to a generation ill-prepared for future financial challenges.

Delays in key life milestones

An estimated 6.5 million UK adults (12%) postpone important financial decisions until they marry, have children or buy a home. However, societal changes mean these milestones are increasingly delayed. The research identified that official records show that the average age for having a first child is now 32, the highest it has ever been. Similarly, the average age for first-time homebuyers has risen to 34, the highest in decades.
People in the UK are also marrying later in life. Women now typically get married at 33 and men at 35, up from averages of 29 and 32 in the year 2000. This trend poses potential risks to financial resilience.

Financial resilience at risk

Delaying key life milestones often means postponing serious financial planning. Two out of five UK adults who have not started a family (21%) cite this as a reason for delaying crucial financial decisions. This includes taking out protection insurance (22%), starting a pension (23%) and contributing to savings (18%).

A significant portion of the population is delaying these decisions until marriage (11%) or homeownership (17%). Consequently, financial engagement among UK adults is declining, with 35.7 million adults not regularly checking their finances.

Impact on financial wellbeing

The lack of engagement has serious ramifications. Without protection insurance, millions of families are left without a safety net. Recent data indicates that half of all critical illness claims occur before age 50, highlighting the importance of early financial planning. Additionally, delaying pension contributions is setting millions of young people toward a retirement shortfall of more than £25,000 annually by the 2060s[2].

People are now waiting until midlife to focus on their finances, with the average UK adult only engaging with their financial planning at age 48. This delay increases the risk of missing significant insurance, savings and investment opportunities.

The risks of waiting

Delaying financial engagement until traditional life milestones like marriage and parenthood can lead to missed opportunities. Five million childless households currently lack essential financial products, and this delay in financial planning is already being felt across the UK.

The reluctance to save contributes to 30% of UK adults having no savings or investments or less than £1,000 set aside for emergencies[3]. By starting financial planning earlier, individuals can build a stronger financial foundation and be better equipped to handle life’s uncertainties.

Source data:
[1] Mustard research consisting of a nationally representative survey of 2,000 UK adults conducted in January 2024.
[2] Analysis conducted by Legal & General based on Opinium Research conducted amongst 2,000 online interviews of people aged 22-32 in August 2023. Income based on Legal & General annuities.
[3] https://www.fca.org.uk/publication/financial-lives/financial-lives-survey-2022-key-findings.pdf

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