I have today read an article about the nation’s savings, (or lack of) with great interest. The company who had prepared the article, a well known UK life assurance company had determined that people in Great Britain have on average just 19 days savings on which to survive.
From a financial planning perspective this figure shocked me as it confirmed my belief in the fact that the majority of people elect not to make any provision in case “the worst should happen”, as they commonly believe that it will not happen to them. Alternatively they deem to have other more important things on which the money needs to be spent.
The fundamental findings of the article seemed to highlight the lack of any basic financial planning which any individual could undertake relatively simply and cheaply.
I appreciate that incomes are being squeezed in real terms as a result of low wage increases and rising inflationary pressures, but as can been seen, not undertaking any planning could lead to much more significant financial difficulties in the event that there was to be any loss of income in the household.
Life assurance is still not seen as essential for many people as many will still refer to the fact that they can not afford the cover. The same can be said for income and / or mortgage protection. The sad truth is that when people find themselves unable to work out of illness or as a result of unemployment, the effect of not taking action is then far too late.
With the apparent continuing reliance on state benefits, which provide only a relatively small degree of financial assistance, and the increasing availability of ‘Payday loans’ it appears to me that the lessons of the credit crisis have not been learnt.
There still seems to be the culture of spend now and save later, and if funds are short then borrow the money at some colossal rate of interest. However this time round, with the rates of interest appearing to be higher still, this is only serving to make the problem worse.
Basic financial planning should be at the core of everyone’s family finances. Would you know how long you could afford to be off work before you started to struggle financially? If you want to know what you can do to ensure your financial security as well as that of your family then we can help point you in the right direction.
* Referenced from Legal & General’s Deadline to Breadline report 2012