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Financial concerns reshape life priorities for two thirds of Britons

Press release: 03/07/2009

  • LV= 'Look After What You Love Index' reveals key life priorities are health and 'quality time', yet millions report working longer and suffering stress

  • Maintaining a comfortable lifestyle is the nation's biggest financial concern, with one in four funding this by cutting back on protecting the things they love in life


Spending 'quality time' with loved ones, and family and personal health have emerged as the nation's top three life priorities, according to a study(1) published today by insurance, pensions and investment group, LV=.

The LV= 'Look After What You Love Index' tracks people’s key life priorities and how their financial concerns and actions match up to these. The study found that meeting the cost of a comfortable lifestyle is a bigger financial concern than dwindling savings, with 6.7 million people(4) happy to raid their savings and investments to cover day-to-day outgoings.

The research also reveals that the pressures of recession have forced nearly two thirds (64%) of people to reassess their life priorities over recent months. Four million adults(2) report seeing less of their family due to work demands, while nearly five million(3) claim their health has suffered from stress fuelled by the ongoing economic crisis.

Despite people's clear focus on the simple priorities in life, the LV= study shows that the majority are taking precious little action to protect and provide for the things they love most. Whilst maintaining current income is the nation's fourth highest priority, and one in three (33%) fear this could be impacted by the financial crisis, just 4% of adults say they have insurance in place to replace lost income. Moreover, only a third of adults (33%) have savings on deposit to act as a safety net whilst a quarter (25%) have cut their insurance or started eating into savings to help make ends meet.

Mike Rogers, LV= group chief executive, said: "Rather than doing away with valuable insurance or eating into savings, it is important for people to take stock of their financial situation. Everyone can take some financial steps, however small, towards protecting the things they love most in life. For example, insuring the breadwinners in the family for loss of income will make only a modest impact on most people's finances, yet can provide vital assistance if the worst should happen."

According to the LV= study, the UK's top ten life priorities and financial concerns are:

LV= Look After What You Love Index

Top 10 life priorities

(1 is highest priority)

Top 10 financial concerns

(1 is biggest financial concern)

1

Family health

1

Meeting the cost of sustaining a comfortable lifestyle

2

'Quality time' with family and friends

2

Having less money saved

3

Personal health

3

Being able to afford desired holidays

4

Maintaining current level of income

4

Having enough retirement money

5

A comfortable lifestyle

5

Cost of servicing debt

6

Home security

6

Having a lower income

7

Savings and investments

7

7

Financial security in case of redundancy / long-term illness

8

Career security

8

Cost of keeping a car on the road

9

Retirement savings

9

Cost of being in current home

10

Being socially responsible

10

Cost of hobbies

Actions don't reflect priorities

The study reveals that people's actions often don’t match their priorities. Seven out of ten people (70%) have home contents insurance, in line with the nation's sixth biggest priority 'home security'. Yet fewer than one in twenty (4%) have insurance to replace lost income, despite this being the UK's fourth highest life priority. With family and personal health both in the nation's top three priorities, the lack of insurance to cover income in case of ill health shows Britons are not putting their money where their mouth is.

Mike Rogers continued: "Three times as many people have pet insurance as have income protection cover, and only one in ten have critical illness insurance. Ideally people should protect all of the important things in their lives, but our study shows their actions don't match their words. This may be due to lack of awareness or a mistaken belief that protecting income and health is very costly. Whatever the reason, now is the time for people to review what financial protection they have in place to cover their key life priorities and take action to bridge any gaps."

The LV= Look After What You Love Index*: Spring 2009 summary

The LV= Look After What You Love Index is a quarterly barometer of people's life priorities and financial concerns across the UK. It also researches what actions people are taking to protect and provide for the things they love and value most in lives, and any changes over time. All figures in the tables below are rankings, with #1 being the most popular response.

1) Britain's top ten life priorities

Rank

Life priorities

Gender

Age group

Family*

(May 09)

Male

Female

<35

35-54

55+

1

Family health

1

1

2

1

2

1

2

Quality time with family and friends

3

2

1

2

3

2

3

Personal health

2

3

3

3

1

3

4

Maintaining current level of income

5

4

7

4

4

4

5

A comfortable lifestyle

4

7

4

7

7

6

6

Home security

8

5

8

5

8

5

7

Money (savings and investments)

7

6

6

9

5

8

8

Career security

6

9

5

6

12

7

9

Retirement savings

9

10

12

8

6

11

10

Being socially responsible

11

8

10

10

9

9

* Family denotes respondent with one or more children

2) The UK's top ten financial concerns

Rank

Top concerns

Age group

Family

(May 09)

(Dec 08)

<35

35-54

55+

1

6

Maintaining lifestyle

1

1

3

1

2

2

Need to save more

2

2

2

2

3

4

Afford holidays

=3

5

4

=3

4

3

Low retirement income

10

3

1

6

5

7

Debt repayments

=3

4

=7

=3

6

-

Reduced income

6

7

5

7

7

5

Financial security if no job

5

6

9

=3

8

8

Car costs

=7

8

6

9

9

-

Home costs

9

9

=7

8

10

9

Hobby costs

=7

10

10

10

3) Effects of financial concerns and actions taken

Effect/action
(May 09)

ALL
(%)

Age group (%)

Family
(%)

<35

35-54

55+

Using savings to 'stay afloat'

22

15

23

28

19

Not being as socially responsible as would wish

19

20

17

20

17

Stress affecting personal health

16

16

19

13

19

Working longer hours, seeing loved ones less

14

19

16

5

21

No time for hobbies

10

16

11

4

14

Loved ones working longer hours

9

14

6

8

12

Reduced or cancelled insurance / protection

7

8

9

5

8

Made redundant, now looking for new job

6

7

6

5

5

Affected in other ways

28

26

26

31

26

No effect on behaviour

27

27

27

28

25

Notes to editors:

(1) ’LV= Look After What You Love Index’ research waves carried out by Opinium Research in May 2009 (15-19th), March 2009 (20 – 24th) and compared to benchmark research conducted in December 2008 (17-19th). For all three waves, over 2,000 UK adults were surveyed online and results weighted to nationally representative criteria.

(2) 64% of respondents say financial concerns caused by the recession have affected their life priorities. Of these 14% say they have to work longer hours so spend less quality time with partner/ family/ friends. Based on total adult population of 48,772,161 (Source: ONS population projections, 2009), this equates to 4m.

(3) 64% of respondents say financial concerns caused by the recession have affected their life priorities. Of these 16% say their health or that of their family has suffered due to the recession. Based on total adult population of 48,772,161 (Source: ONS population projections, 2009), this equates to 5m.

(4) 64% of respondents say financial concerns caused by the recession have affected their life priorities. Of these 22% say they are using savings to 'stay afloat', pay the mortgage, etc. Based on total adult population of 48,772,161 (Source: ONS population projections, 2009), this equates to 6.7m.

The research shows that 29% of UK adults have at least one child, equating to 14.1m adults, based on total adult population of 48,772,161 (Source: ONS population projections, 2009). 54% of 14.1m equates to 7.6m households.


LV=

LV= is a trademark of Liverpool Victoria Friendly Society Limited (LVFS) and LV= is a trading style of the Liverpool Victoria group of companies.

LV= employs more than 3,800 people, serves more than 3.5 million customers and members, and manages around £7bn on their behalf. We are also the UK's largest friendly society (Association of Friendly Societies Yearbook 2006/2007, total net assets) and a leading mutual financial services provider.

LVFS is authorised and regulated by the Financial Services Authority and entered on the Financial Services Authority Register No. 110035. LVFS is a member of the ABI, AMI, AFS and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.

www.LV.com