A report by Hargreaves Lansdown, reported by Which? on 11 June 2024, found that 57% of homeowners do not have enough life cover to protect them1. The figures cover 14 million UK households that have at least one dependent1.
The average life insurance gap for households with dependents is £89,8001. For homeowners with children the gap is larger, averaging £194,200, while renters without children have a smaller gap of around £3,4001.
Sarah Coles, Hargreaves Lansdown's head of personal finance, said the gap reflects what the cover is expected to pay for:
"The gap is bigger for homeowners, who need insurance to cover the cost of paying off the mortgage, so those they leave behind don't have to worry about this massive monthly bill."
"It's also bigger for parents, who don't always have the cover they need to manage the cost of caring for their children until they reach adulthood."
Hargreaves Lansdown calculated the annual cost of closing the gap at around £134 on average1. The cost varies by household type:
| Household type | Average life insurance gap | Annual cost to close the gap |
|---|---|---|
| Households with dependents (average) | £89,800 | £134 |
| Homeowners with children | £194,200 | £321 |
| Renters without children | £3,400 | £5 |
Source: Hargreaves Lansdown figures reported by Which?1
The report said 2.4 million households may be able to close the gap without difficulty, being neither behind on debt repayments or bills nor short of cash at the end of the month1. Coles said this group is dominated by higher earners, with 78% in the top two-fifths of all earners, and that there are none in the bottom two-fifths of earners who can close the gap and still save1.
Why it matters for households
Life cover is intended to pay off debts and meet ongoing costs, such as a mortgage and the cost of raising children, if the main earner dies1. The figures suggest the shortfall is concentrated among homeowners and parents, groups whose cover needs are tied to a mortgage balance and to the number of years a child remains dependent1. For renters without children the gap is far smaller, at around £3,4001.
The cost of closing the gap is given as an annual premium: about £134 on average, £321 for homeowners with children and £5 for renters without children1. Whether a household can meet that cost depends on its budget. Hargreaves Lansdown found that the 2.4 million households it identifies as able to close the gap are mostly higher earners, and that no household in the bottom two-fifths of earners could close the gap and still save1.
The report does not set out how the gap is distributed by age, region or mortgage type, and no breakdown of the underlying data has been reported1. Which? notes that life insurance is not a legal requirement when applying for a mortgage1.
What happens next
No further steps, publication dates or responses from insurers have been reported1. The figures are drawn from a Hargreaves Lansdown report and were published by Which? on 11 June 20241. Households wanting to work out an appropriate level of cover can read our guide to how much life insurance cover you need, and our insurance guide explains how policies, premiums and exclusions work.
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