Are your clients financially prepared for 2016?
The beginning of the year can be a depressing time; the festive period is over for another 12 months, the days are short, the weather is generally rubbish and the credit card statements land on the document to remind us of the Christmas excesses start.
It’s little surprise that Citizens Advice regularly reports a spike in calls regarding debt at this time of the year as people seek help with their finances1.
More worryingly, a recent report by the housing charity Shelter highlighted just how many people are’ treading water’ financially. According to the findings, high rents and mortgages are resulting in a significant number of families cutting back to make ends meet; 27% said that they had reduced winter spending e.g. heating and winter clothes to meet costs, and 10% expressed fears that they would be unable to make the rent or mortgage payments.
The number of working people who are struggling should concern us all. Needless to say that this is a problem that needs to be tackled at various levels but intermediaries do have a vital role to play.
The fact that so many are living hand to mouth leaves little breathing space in the event of a financial shock such as accident or illness leading to a period of absence from work with reduced or no income. Someone who is already struggling to make mortgage payments whilst in work is going to have less chance of doing so if they are forced to rely on Statutory Sick Pay (SSP) or Employment and Support Allowance (ESA) which both represent a massive reduction on the average UK earnings.
Association of British Insurer figures suggest that 10.8m households are at risk of their income falling by at least a third if the main earner should stop working.
Providers of income protection, like Cirencester Friendly, rely on intermediaries to highlight to their clients the importance of having cover in place should the worst happen. Whilst taking out a protection policy represents an extra overhead, it does bring peace of mind. Many have a “it won’t happen to me” attitude when considering the possibility of serious accident or illness, but nobody expects it to happen. The important thing is to be prepared – if one of your clients only just has their head above water with their current earnings, they will soon start drowning if ill-health and no income protection prevents them from working.
Ensure that your clients have adequate safeguards in place with income protection from Cirencester Friendly.
