On BBC1 last Thursday (13th December) there was a programme entitled “Britain’s Hidden Housing Crisis”.
The concept of the programme was to highlight the issues affecting many people in the UK at present and showed some very heart-breaking cases of people who had had their homes repossessed and followed them and their families over the weeks leading up to eviction day and beyond. As a financial planner I had a lot of sympathy with the people involved as for the most part, they were hard working people who quite simply had fallen on hard times for various reasons.
When you look at the statistic that currently 159,100* mortgages are in arrears at present with 26,300 homes being repossessed in the first three quarters of 2012, the scale of the issue starts to become apparent.
As a financial planner I do wonder how many of these repossessions were avoidable. For example, many people fall into arrears because they lose their job and simply do not have the funds to pay the mortgage. Others contract cancer or other illnesses or in extreme cases the breadwinner of the family dies.
Whilst there are likely to always be repossessions, I strongly believe the number could be massively reduced if people just took simple steps to protect their income, for if/when the worst does actually happen.
There are many different protection plans to support you in many eventualities which include; unemployment cover which pays your mortgage should you be unable to work, life cover which provides a lump sum in the event of your death and critical illness cover which provides a lump sum in the event of contracting a critical illness.
I know that not everyone can qualify for all of the above, however, to have the “it won’t happen to me” or the “I can’t afford any cover” attitude, is completely illogical. I believe that if you can afford a mortgage or even private rent, you should be able to afford the correct level of protection sufficient for your requirements and this should be prioritised over other expenses such as satellite TV and mobile phone contracts.
The consequences of getting this wrong really are catastrophic! If you wish to discuss your cover requirements then do not hesitate to contact us, we can help you to get this right!
* Source council of mortgage lenders website www.cml.org.uk/cml/statistics Friday 14th December 2012.