The cost of living without protection insurance

Without doubt current cost-of-living crisis is hitting us hard. According to a Government report published in June this year, around three in four adults (77%) reported feeling very or somewhat worried about the rising costs of living and already around 60% of adults have reported spending less on non-essential items in response to rising costs. The Office for National Statistics – Opinions and Lifestyle Survey, found around 15% of adults report using more credit than usual, while in a separate question, around 21% report that they have had to borrow more money or use more credit in the last month compared with a year ago. Similarly, around 45% of adults reported that they do not think they will be able to save any money over the next 12 months. Around 42% of adults reported finding it somewhat difficult or very difficult to afford their energy bills.

Furthermore, in a survey conducted by HR software provider CIPHR, over half (53%) of UK adults, when asked how rising living costs are impacting them at work, said they would consider or have gone to work unwell to avoid losing their wages.

It's therefore not surprising that YouGov found that people are pessimistic about the future, with four in ten Britons expecting their finances to get even worse in the coming months.

As a result, it seems that protecting our income is now even more essential than ever!

Consider if, on top of the financial strain that we are all feeling, that you became seriously sick or injured and could not go to work. How would you cope with having even more financial (and not to mention emotional) pressure of not being able to work and at the same time still trying to pay ever increasing prices to get by day-to-day?

If the answer is that you can’t imagine how you’d cope, then income protection could be of more value to you than ever before. It could provide a safety net if something goes wrong, and you are unable to work in the future and give you some peace of mind today.

Income protection pays you part of your monthly income. It is an insurance policy that can help support you with a monthly payment if you are ill or injured and can’t work - it can pay out for a range of conditions including cancer and mental health issues. The pay-out is tax-free and can help you protect your finances while you recover. The money can cover anything, like bills, mortgage repayments, rent and childcare costs. So, you’re able to focus more on getting better and back to work – and because you don’t pay tax on your monthly payments, it should replace most of your salary.

If you have a family who depend on you financially, having income protection can give you peace of mind that their needs – as well as yours – will be covered if you become unable to work because of illness or injury. It means you won’t have to worry about how you’ll be able to feed the family or pay the bills, without seriously harming long term financial health by dipping into your savings (if indeed these aren’t already being depleted).

Let us not forget that the pandemic gave millions of us a scary insight into just how quickly circumstances can change, by forcing a huge proportion of the population out of work. Now, imagine how horrendous that would have been without the safety net that the furlough scheme provided for so many households nationwide.

If the past few of years have taught us anything, it is that no one can predict what the future holds. Illness or injury can stop you working at any time and without warning and being amid a cost-of-living crisis, means that having a plan in place is more essential than ever.

Nothing is certain during uncertain times, but being protected could provide a much-needed financial safety net that could prove to be invaluable to any of us.

For more information, contact us on 01245 956900 or enquiry@mortgagebusiness.net