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Families Urged to Put Plans in Place for Loss of Income

27 March 2018 Written by Prosperity Financial Solutions Category: Blog

It was alarming to read that the average UK family could only sustain their lifestyle for 46 days if they were to suddenly lose their main income. 

According to the research by Post Office Insurance, households with an average monthly income of £3,156 post tax and available assets such as cashable savings of £10,741 would only manage for a short time without their income when faced with regular monthly spending (£1,313) and debt commitments (£8,759).loss of income

Working families with parents in their 30s and 40s are apparently particularly ‘at risk’. Although they are less in debt and have more assets than some groups, research has shown that if they were to lose their income, their lifestyles would not be sustainable for more than a few days.

Despite these concerning figures, the research indicates that those earning the primary income in most families may not have a realistic expectation of their financial capabilities. One in four UK adults do not feel their household has a contingency plan in place if they were to lose their income for four weeks. This lack of contingency plan increases to 34% of households if the income loss was to last for six months or more.

“It’s concerning that so many people in the UK would not be able to maintain their lifestyle and provide for their families should their circumstances suddenly change,” commented Rob Clarkson, Managing Director of Post Office Managed Services.

“There is a common misconception that life insurance and critical illness cover can only benefit the very wealthy who have a large amount of assets, but as this research demonstrates, many families could benefit from it, if only to protect their family’s day-to-day lives at a difficult time,” he added. 

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