By Chris James

Every year, we all spend hundreds if not thousands of pounds insuring our home and contents, our cars, our mobile phones, our pets; the list is endless. One thing that strikes me as a Financial Planner is that even though insurance is seen as important to have, time after time I consistently see a lack of potential clients insuring ultimately what is their biggest asset… their INCOME!

It is an uncomfortable situation to consider, what would I do, how would my family cope if I couldn’t work and didn’t have an income? What would our lifestyle be, how would my future and that of my family change?

I always recommend that my clients take some time and think about those uncomfortable consequences and encourage them to see the vital importance of protecting their income.

We are also probably all guilty of undervaluing our income as well. Take a moment and think about the following:

Current income x years before retirement = value of your income.

The number is likely to be a lot higher than you expect and doesn’t factor in any future pay rises!

Will this affect me?

Most people don’t think this will affect them, but the risk is probably a lot higher than you might think.

ONS have said that there were around 2.5million people between June and August 2022 who were “economically inactive” due to long term sickness and Aviva confirmed that the average age for a claim in 2022 was 42 for males and 44 for females.

Will my employer or the state look after me?

Potentially for a short period but check your contract to see how long they would continue to pay you for. And while you’re at it, google statutory sick pay as the government is probably not going to provide anywhere near enough.

Can I rely on savings?

Think about what you have available and how long that would last for.

Apparently, the average household could only survive for 19 days if they lost their income.

What can I do to protect myself and family?

If any of the above has made you stop and think about your own position, please contact the team at Wealth Matters for a further discussion.

Have a pension to fall back on?

You may have a sizeable pension in place but if you are affected before age 55, you would not be able to access your pension (and this is increasing to age 57 in 2028).