One in three UK adults has experienced a shock to their finances through bereavement, redundancy, or an illness that has stopped them from working.
The Money Advice Service suggests the benefits of protection insurance.
It’s probably there at the back of your mind, niggling away, the worry of how you’d pay your mortgage or rent if you suddenly lost your income. But as a nation we tend to think it won’t happen to us, that we don’t need to plan.
Well, new research by the Money Advice Service has found there’s a good chance you could be affected by a situation that takes away your ability to pay. In the last five years, we found one in three UK adults has experienced a shock to their finances through redundancy; an illness or an injury that has stopped them from working, or a bereavement.
Few had savings or insurance to help soften the impact of that event, leaving many open to the possibility of losing their home.
So what can you do to make sure you can keep a roof over your head when times get tough?
Set up a rainy day fund
In the first instance, you can build up a rainy day fund. Having enough to cover your home payments for at least three months gives you a bit of room if you were to suddenly lose your job.
If you’re struggling to put money aside for savings, it’s worth seeing where you are able to cut back. The Money Advice Service budget planner is a great way to help you work out how you spend your money each month and find ways to spend less.
