Don’t Leave It To Someone Else

Are you curious about the title? How many of you thought the article might be about spending all your money while you can or maybe an article about inheritance tax? Well it’s neither of these. It reflects an ongoing concern that I have that in the UK, we now are firmly entrenched in a ‘blame culture’ society. One only has to look at social media, journalism irresponsibility, blatant ‘make a claim advertisements’ on TV, the opportunism of politicians and the divisiveness of huge decisions affecting our futures, to see that it is far too easy for us to convince ourselves that someone else should always be there to pick up the pieces.

I have been giving financial advice for more than 15 years and one thing I have always believed is that the area of ‘protection’ should always come first and it starts as our responsibility. You deal with uncertainty first – unpredictable events outside our control. You can’t start planning, without making sure your finances can cope with unexpected risks, such as:

  • Losing your job
  • Losing your health
  • Losing your life

All of these events can come out of nowhere, and when we have people that rely on us like a spouse or partner, children or other dependents, the impact can be catastrophic. In all these cases we have a choice, either to take personal responsibility to protect ourselves, or maybe to rely on any provision the state might provide. Now before I offend anyone, I fully agree that for some people there is no choice. Many are not in a position financially to address these potential issues, even if they wanted to. But in many circumstances we financially could, but choose not to consider – “I can’t afford”, often (but not always) means, “I choose not to afford”.

So, below are just a few life events, suggested solutions and an example of approximate cost of those solutions which I have identified from various online comparison websites – based on a healthy, non smoker male 30 years of age.

Losing your job –

  • £1,000 p.m. benefit payable for up to 5 years – starts after 4 weeks. Cost: £15 p.m.

Contracting a Critical Illness

  • Over a term of 20 yrs – £100,000 Benefit (includes life cover). Cost: £22.54 p.m. 

Protecting others in the event of your death

  • Over a term of 20 years – £100,000 cover. Cost: £5.44 p.m.

Unable to work because of injury or health

  • £1,000 p.m. benefit – starts after 4 weeks.

Occupation: Builder

  • Payable to age 65 – Cost: £30.47 p.m. or
  • Payable for 2 years – Cost: £16.19 p.m.

Occupation: Administrator

  • Payable to age 65 – Cost: £18 p.m.
  • Payable for 5 years – Cost: £10 p.m.

As I always say, it’s important to take advice as everyone’s circumstances and objectives are different.

Author: Phil James, Grosvenor Consultancy Ltd

The Financial Conduct Authority does not regulate tax advice and some forms of offshore investments. The above does not constitute financial advice and we always recommend you seek advice for your own specific circumstances. The value of investments and the income from them can fall as well as rise and you may not get back the full amount you invested.

All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and Inland Revenue practice.  Levels and bases of tax relief are subject to change.  The tax treatment depends on individual circumstances

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