Around 4.1 million households in the UK have opted not to have children, joining the dual-income childless or single-income childless movement, also known as DINK and SINK. While this decision could save them over £12,000 a year, given the current cost of raising a child, they are making some worrying mistakes that parents would never make.
Legal and General’s research revealed that while DINKs and SINKs have more funds for their lifestyle, they are less engaged with their finances and, as a result, less savvy in this regard. Because children are often a driving factor behind many financial protection decisions, both DINKs and SINKs may not even consider issues such as insurance, which most parents refuse to do without.
Some 67% of DINKs and a staggering 87% of SINKs have no life insurance, citing their lack of dependents as a deciding factor, but both groups are choosing to forgo other individual protection measures. 76% of DINKs and 82% of SINKs have never had income protection, while 67% and 80% respectively have also never had critical illness cover.
When you factor in the cost of raising a child to 18, DINKs save £166,000 while SINKs are left with £220,000. Both groups are much more comfortable making financial decisions and more confident about their financial future than their child-rearing counterparts, despite these costly mistakes.
This could be because 73% of DINK households and 69% of SINK households are more likely to have an emergency fund than other households, meaning they have a reserve fund to fall back on. However, despite having more funds than other households, they are also more disconnected from their finances, with the majority of both groups not keeping track of their finances or reviewing budgets that could benefit their lifestyles.
Paula Llewellyn, director of strategy and client services at Legal & General Retail, said: “SINKs and DINKs are feeling more financially secure and there is a real opportunity for these groups to remain that way into retirement. But there is also a risk that the confidence that comes with financial security can lead to low levels of financial engagement.”
While she understands why these households may not think insurance is as vital for them without dependants, she insists: “There are many benefits to products such as life insurance, income protection insurance and critical illness insurance if you are single or have no children. If you have critical illness insurance, for example, and you need to claim due to a serious illness, your cover could pay for your living expenses if you are unable to work.”
