The private rental market could be heading for a bumpy ride as 13 per cent of renters have gone into arrears in the past 12 months, research from Axa has revealed. (source: Financial Adviser 14 August 2008)

Research showed that of those who had fallen in arrears, 7 per cent had done so in the past three months and more than 50 per cent of private renters are becoming increasingly concerned about being able to afford their rent .

The provider also said that 95 per cent of those in privately-rented accommodation had no kind of mortgage payment protection insurance or rental insurance to help if they lost their job or found themselves unable to work for medical reasons.

Mike Keating, managing director of personal lines intermediary for Axa, said: “Our research shows that more than a third of people privately renting are doing so because they cannot get a mortgage at the moment.

It is inevitable that at some stage in our lives we will all fall ill or suffer at the hands of fate and find our jobs under threat due to ecomnomic variables and this is where Mortgage Payment Protection Insurance becomes vital!

Employers will obviously be more generous during the good times, perhaps being more flexible and generous than you could reasonably expect but never forget, they are only legally obliged to pay you if you are absent from work due to illness. You must however be off work for at least 4 consecutive days and earning an average of £90 per week before deduction of tax and national insurance.

Statutory Sick Pay (SSP) is only payable for up to 28 weeks @ a weekly rate of £75.40 from 6 April 2008 to 5 April 2009 which will very likely be less than your full earnings.

Income Protection Insurance is an effective way to try and manage the financial risk and is certainly worth considering. This is even more important if you are the “breadwinner” as your family’s financial well-being could be under serious threat if you don’t take precautions.