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Catch up with the latest press releases from LV=

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The British salary - divide by two in 2012

Press release: 05/04/2012

  • 22 million Brits (45%) have others dependent on their income for basic living costs

  • 29% of those with dependents never expect to become financially dependent-free

  • And all others don’t expect to become financially dependent-free until age 51

  • Almost a third (28%) of women depend on their partner financially vs. 6% of men

A new report from protection specialist LV= reveals that 22 million [1] adults (45% of all Brits) have others financially dependent on their income for basic everyday living costs, including food and housing, with the average British salary supporting two people [2].

LV='s Dependency Index shows 29% of Brits with financial dependents never expect to become financially dependent-free, and those that do, expect to wait until they are 51 years old on average. A further 4.5 million [3] of them expect to have other people dependent on their income until they are at least 65. The research also reveals 2.5 million [4] UK adults are supporting four or more people, including themselves, as the only salaried earner in their home.

In addition to the 22 million adults with others dependent on them for every day basic living costs, a further six million [5] (22%) also support others financially for non-essential items. 14% (3.3 million) [6] of those with dependents are financially supporting a parent or elderly relative.

Mark Jones, LV= Head of Protection, said: "People are feeling financially squeezed and pulled in many directions. Salaries are not rising in line with inflation, and with living costs on the rise as well as continued unemployment problems people are feeling the pressure of having others relying on their income, be that younger, or older family members."

"Previous LV= research showed the cost of raising a child from birth to 21 years is in excess of £218,000 [7], and with young people struggling to find employment or save sufficient deposits to get on the housing ladder, the trend for children to be dependent on their parents' incomes later into life too is no surprise. This coupled with the fact that for some, there are parents or elderly family members to support, puts significant pressure on working Brits."

Dependent later in life
One in seven (14%) aged over 55 are still supporting a child financially with everyday basic living costs. With many people having families much later in life than previous generations, the number of people in their 60s still supporting children financially is likely to increase in the future.

Stretching salaries
One in five (20%) of those with dependents (6.2 million) [8] feel their salary is being stretched, and a fifth (19%) say this pressure impacts on the money they can save for the future. Almost a fifth (17%) believes they will have to work for longer in life than they'd hoped because of others relying on their salary.

Dependent not independent women
According to the research nearly a third of women (28%) in the UK depend on their partner for financial support, versus just six per cent of men who rely on their partners. Over a third (36%) of adults admits to depending on someone else or the state financially, ranging from their parents to children or siblings.

Regional differences
The North East of England has the highest number of people with others financially dependent on them whether for basic living costs or non-essential expenditure (68%), followed by Northern Ireland (64%) and Wales (62%). Nearly a third of people in the North East (31%) have two additional dependents, while a fifth (19%) has three or more. London has the lowest number of people with others financially dependent on them (50%). Full regional breakdown is available on request.

Mark Jones continued: "Lots of us are supporting people financially, often in a stage of life when we would normally expect the level of financial support we give to be decreasing."

"With the pressure of others relying on one person’s salary it's important people are prepared if there is a change in their financial circumstances, for instance, what would happen if that person is unexpectedly unable to work due to illness, accident or unemployment? We would encourage people to ensure they have a safety net in place so they can continue to support themselves and their family. Similarly, cancelling any life cover or income protection already in force is a short term answer to financial strain which could have much greater financial consequences in the future. Products such as income protection should remain a vital part of our planning for the long term."

Protecting the future
When it comes to safe-guarding the family finances, 50% of couples don’t have any life cover or income protection in place. Just four in ten (43%) have life cover, and only 11% have both life cover and income protection [9].

For further information about LV= please go to www.LV.com.

Notes to editors:

The LV= Dependency Index was constructed through research online from 13th to 15th March 2012 by Opinium Research on behalf of LV= (total sample size was 2,010 UK adults aged over 18).

Within the research a 'dependent' was defined as someone who depends on an individual for basic things like food and housing and covers children, elderly relatives and friends unless otherwise specified.

[1] Current UK adult population is 49,969,000 (latest ONS predictions). 78% of respondents who have dependents on their salaries indicate these dependents rely on them for basic living expenses –900 respondents divided by the total sample of 2,010 and multiplied by total UK adult population of 49,969,000 = 22 million (or 45% of the whole population)

[2] Figure based on total number of salaries in household including respondent and/ or partner. A family supporting two additional dependents, with both the respondent and partner earning salaried wages, would count as having 2 salaries supporting 4 people in total (or two people per salary)

[3] Current UK adult population is 49,969,000 (latest ONS predictions). 9% of all respondents selected age 65+ as the age they think they will become free of anybody being dependent on their salary for basic living costs – 9% is 182 respondents divided by the total sample of 2,010 and multiplied by total UK adult population 49,969,000 = 4.5 million

[4] Current UK adult population is 49,969,000 (latest ONS predictions). 99 (5%) respondents have four or more dependents (including themselves) relying on their salary alone divided by the total sample of 2,010 and multiplied by total UK adult population 49,969,000 = 2.5 million

[5] Current UK adult population is 49,969,000 (latest ONS predictions). 255 (22%) of those with financial dependents who indicate their dependents don’t rely on them for basic living expenses, but on other non-essentials, divided by the total sample of 2,010 and multiplied by total UK adult population 49,969,000 = 6 million

[6] Current UK adult population is 49,969,000 (latest ONS predictions). 14% of respondents who have dependents who depend on them for basic living expenses have parents and/or elderly relatives dependent on their salaries for basic things like food and housing – 14% is 134 respondents divided by the total sample of 2,010 multiplied by total UK adult population 49,969,000 = 3.3 million

[7]The cost of a child calculations, from birth to 21 years, have been compiled by the Centre for Economics and Business Research (CEBR) on behalf of LV= in December 2011 and are based on the cost for the 21 year period to December 2011.

[8] Current UK adult population is 49,969,000 (latest ONS predictions). 20% of those with dependents said their salary has to go as far as possible – 20% is 248 respondents divided by the total sample of 2,010 and multiplied by total UK adult population 49,969,000 = 6.2 million

[9] Stats on life and income protection cover taken from LV=’s Cost of a Child Report and research conducted by Opinium Research online from 3rd to 5th January 2012 and the total sample size was 2,119 UK adults.


About LV=

LV= employs over 5000 people and serves around five million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and a range of trades unions.

LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF. www.LV.com.