The world is changing at a faster rate than ever before – across technology, the environment and politics. Against this background of unparalleled change, we believe that everyone deserves to Live Confident, but a lack of financial resilience is undermining this confidence.
No-one wants to think about facing an income shock yet we are all likely to face periods of financial difficulty during the course of our lives. And while some people are able to recover relatively quickly, others are ill-prepared and struggle to bounce back or cope.
This forms the theme for an Association of British Insurers (ABI) event this week - “The power of being well informed: protecting against income shocks” - where I will be sharing the findings from our latest Income Roulette Report.
In this report, we investigate the UK’s financial resilience and people’s ability, both financial and emotional, to withstand a financial shock or change in circumstances.
Our research found that financial resilience across UK households is woefully inadequate with less than half of those we surveyed (44%) having more than three months’ outgoings in savings - the definition of financial resilience used by the Money Advice Service. We delved deeper into three particular groups the Peter Pans (30-35 years olds), the Sandwich Generation (in their 40s and 50s with both children and older dependants and those Approaching Retirement (mid 50s+)
What struck me were:
For many people their ability to earn is their most important financial asset, and accessible advice and an income protection product can play a vital roles in safeguarding this.
I believe that there are other practical steps that can be taken to help people protect themselves and their loved ones against the financial and emotional effects of unexpected life shocks
There is an important role for Government, the wider industry, providers and financial advisers to improve consumers’ understanding of the importance and relevance of financial planning, and what steps they can take to improve their financial resilience
Head of Marketing, LV=
LV= is a leading financial mutual and serves over 5.8 million customers with a range of financial products. When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products. We offer our services direct to consumers, as well as through IFAs and brokers. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered number 110035. LVFS is a member of the ABI and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.