Women without savings urged to protect families

August 15, 2014 | 8years | Insurance News

Hundreds of thousands of women with no savings to their name have been warned they could be putting their families' financial future at risk by failing to have the right kind of protection in place.

Almost one in three (30%) working mums in the UK has no savings whatsoever, according to a new report from Aegon UK, meaning around 1.6 million mothers would be unable to support their families if they became unable to work.

The "What Really Matters" report also reveals that just over a third (34%) of working mums would rely on savings but that almost three-quarters (70%) claim they wouldn't last six months living off this should they be unable to earn.

More than half of women (55%) have no idea how much state support their family would receive if they fell ill, and with statutory sick pay currently at £87.55 a week, many women would suffer a shortfall of £21,000 based on the average annual income.

With almost three-quarters (72%) of mothers who work to support their families admitting they would be forced to make serious sacrifices if they found themselves out of work due to illness, the need for a financial Plan B is clear.

Faced with the consequences of being out of work for six months, over a quarter (27%) said they would have to stop heating the family home in order to save on outgoings, while almost a quarter (23%) of those paying for childcare said they would have to give this up.

The aim of the report is to highlight the need to be financially prepared, not just from a savings point of view, but also in respect of protection insurance.

Income protection insurance and critical illness cover may seem like an expenditure you can do without, but given the financial security and peace of mind they can provide, must be worth considering.

It could be a small price to pay should you be unable to work, and would mean you wouldn't need to rely on external support or cut back on living expenses.

On a more uncomfortable note, nearly half (49%) of mums have never discussed with family what would happen if they died, potentially leaving their loved ones with financial worries at what would already be a difficult time.

It's a discussion that everyone needs to have with their family, no matter how uneasy the situation may be.

This article was taken from: moneyfacts.co.uk