Earlier this year, the Financial Conduct Authority published the results of its latest Financial Lives Survey.
These showed, among other things, that COVID-19 had presented a severe test for the population’s finances, and that about a quarter of UK adults displayed signs of low financial resilience. Such signs include over-indebtedness, low levels of savings and low or erratic earnings.
There were two stages to the FCA survey: the first covered the period August 2019 to February 2020; the second was conducted in October 2020 to test the impact of COVID-19 on the population’s financial health. The pre-COVID stage presented a mixed picture, with some positive findings but also some areas of concern in matters such as protection insurance cover.
Mind The Gap
On the plus side, the FCA reported, ‘The proportion of people holding any insurance product increased from 81% in 2017 to 88% in 2020.’ However, the survey exposed what the FCA referred to as ‘a significant protection gap’, as its data showed that 53% of respondents held no protection products whatsoever, albeit an improvement from 59% in 2017.
The protection gap was particularly marked among those aged 18-24 as well as a range of other groups, including those with vulnerabilities or lacking confidence in managing their money. Yet many in these groups are responsible for families that would likely suffer hardship if they were to die prematurely or suffer unexpected illness or injury.
There may be many pressures on the financial resources of adults in the younger age ranges and on vulnerable groups, but it is important for them to have adequate protection if possible perhaps with help and encouragement from wider family as appropriate.
Independent Advice for Insurance
As experienced Independent Financial Advisors, we are always ensuring we follow the most up-to-date standards. You can learn more about us here. If you’d like to learn more about insurance advice, please get in touch. We aim to help you find the most suitable life insurance policy for your circumstances, giving you peace of mind.
As well as life insurance, Clifford Osborne also offer a range of advice on pensions, investments, equity release, mortgages and more.
We are based in Eastbourne, East Sussex, but meet with clients (both online and in person) across the South East including Hastings, Lewes, Brighton, Bexhill, Uckfield, Heathfield, Newhaven, Seaford, Tunbridge Wells and further afield.
Read more financial advice in our blog.
Please read our VoucherFor reviews here.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
It is important to take professional advice before making any decision relating to your personal finances. Information within this blog is based on our current understanding of taxation and can be subject to change in future.
It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.
