Your complete guide to financial protection

Financial protection is an important part of creating long-term security. Yet, it’s something that many people overlook.

Appropriate financial protection can provide you or your family with an income or lump sum when you need it most. It can create a valuable safety net and help ensure you’re still able to meet financial commitments if something unexpected happens.

If financial protection isn’t something you’ve thought about, this guide can help you answer questions like:

  • What is financial protection?
  • How does financial protection add value to your financial plan?
  • What are the different types of financial protection, and which ones are right for you?
  • What things do you need to consider when selecting financial protection?

Download “Your complete guide to financial protection” to learn more and understand if financial protection is right for you.

How a virtual “shopping basket” is used to calculate the rate of inflation

Over the last few months, you’ve probably heard a lot about inflation and the effect it can have on your cost of living. While you may be familiar with the headline figures, how is it calculated?

The key figure that you normally see is the Consumer Price Index (CPI).

In the 12 months to March 2022, according to the Office for National Statistics (ONS) data, the CPI rose to 7%. This is the highest rate of inflation for 30 years and was driven by rising fuel and energy costs, which has been linked to the war in Ukraine.

The Bank of England (BoE) has a target of keeping inflation around 2%. However, the BoE expects inflation to rise to around 8% and then fall back over the next two to three years. It noted that even though the rate of inflation is expected to slow down, the prices of some things may stay at a high level when compared to the past.

Misconceptions mean that 40% of homeowners don’t have life insurance

Do you have life insurance in place? A survey suggests that some homeowners are choosing not to take it out because of common misconceptions about how life insurance works.

Life insurance would pay out a lump sum to beneficiaries if the policyholder passed away during the term. As a result, it can provide financial support to your loved ones when they need it most and ensure they don’t need to make large financial decisions when they’re grieving.

You can choose how much cover life insurance provides. Often, this is linked to how much your mortgage is. You can also consider other things, such as school fees or day-to-day living costs, to ensure your family would be financially secure if the worst happened.

You can also select how long cover will last. This is often tied to how long remains on your mortgage or when children will reach adulthood.

8 things entrepreneurs can do to improve their financial resilience

More people than ever before are working for themselves and setting up businesses. It can be incredibly rewarding, but you also need to consider how it’ll affect your financial resilience.

The UK has a great spirit of entrepreneurship. According to the Office for National Statistics, around 4.8 million people (more than 15% of the labour force) is self-employed, and it’s something younger generations are continuing.

According to a report in Business Leader, 50% of new businesses set up between July 2020 and June 2021 were done so by people aged between 25 and 40.

And Generation Z, who are under 25, is already responsible for 7.8% of new companies.

The data suggests that being self-employed is going to become even more common in the coming years. The graph below shows the different types of self-employment across the UK.

“Midlifers” are hit by time and financial pressures. Financial planning can help balance your priorities

Individuals aged between 40 and 60 – dubbed “midlifers” – are facing time and financial pressures as they try to support their families. Many are feeling the strain and don’t have the resources to focus on their own goals, and financial planning could help.

According to a survey from Legal & General, 6 million midlifers are finding themselves caught in the middle of providing financial support to adult children and providing unpaid care to ageing relatives. On top of this, it’s a crucial period for securing their own financial future and retirement.

The research found 17% of midlifers provide financial support to another adult, totalling £10 billion a year.

  • Those supporting grown-up children provide, on average, £247 a month.
  • Midlifers financially helping elderly parents or other relatives spend, on average, £282 a month.

The findings suggest that at age 45, you’re likely to have the greatest level of financial responsibility, while age 58 is when you’re most likely to start taking on some care responsibilities.

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