Guide to Protecting Your Financial Plan

Oct 6, 2016 | Financial Advice

Safeguarding the people and things that matter most

The right professional financial advice can give you the freedom to live life on your terms, and key to this is safeguarding your financial security by making sure you have adequate protection in place to care for the people and things that matter.

A third (33%) admit that if they or their partner were unable to work for six months or longer due to ill health or personal injury, they’d be unable to live on a single income.

No life insurance cover

So it’s concerning to see that half (50%) of the UK’s mortgage holders have no life insurance cover in place, meaning that 8.2 million[1] people are leaving themselves and their families financially exposed if the unforeseen were to happen.

Research also shows that only a fifth (20%) of the UK’s mortgage holders have a critical illness policy, leaving many more millions at risk of financial hardship or losing their home if they were to become seriously ill.

Unable to work

A third (33%) admit that if they or their partner were unable to work for six months or longer due to ill health or personal injury, they’d be unable to live on a single income. And more than two fifths (43%) of those who couldn’t cope with a single wage say they would resort to dipping into their savings in order to survive.

Yet 43% say their savings would last for no more than a couple of months, and 15% don’t even know how much they have, meaning they could be relying on backup which doesn’t actually exist.

Mortgage arrears

Just under a quarter (23%) could only afford to pay household bills for a maximum of three months if they or their partner were unable to work, and 23% could make a maximum of just three monthly mortgage payments. Another 15% admit they’re not actually sure how long they’d be able to cope with their mortgage payments.

Welfare reforms make the case for financial protection all the more pressing. A quarter (25%) of mortgage holders who say they’d be unable to live on a single income if their partner was unable to work also admit that they’d rely on state benefits to ensure they could manage financially. Changes to Support for Mortgage Interest, which is the only safety net in place for many families if they were unable to pay their mortgage, mean that people now have to wait 39 weeks before receiving this benefit instead of the previous 13, which could be too late for many if they have no other protection in place.

Are you putting you and your family at significant risk?

None of us want to think about the worst, but these findings show that there are an alarming number of mortgage holders who are putting themselves at significant risk by failing to arrange cover for the unexpected. Many people believe that they’ll be able to rely on the state if the unforeseen happens, but recent cuts to welfare benefits are exacerbating their vulnerability. To review your protection requirements, please contact us – don’t leave it to chance.

Contents

  • Life insurance
    Providing a financial safety net for your loved ones
  • Different types of life insurance
    Choosing the right type of cover
  • Term life insurance
    Protection for a specified fixed period of time
  • Whole-of-life insurance
    Guaranteed financial protection that lasts for the rest of your life
  • Critical illness cover
    If the worst does happen, it’s important to make sure you’re financially protected
  • Income protection insurance
    No one is immune to the risk of illness and accidents
  • Making a will
    An essential part of your financial planning
  • Power of Attorney
    Permitting someone to act on your behalf when you are no longer mentally capable of making decisions
  • Inheritance Tax
    Securing more of your wealth for your loved ones
  • Setting up a trust
    Choosing the right structures can protect assets and give your family lasting benefits

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This guide is for your general information and use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.

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