Martin's blog

Financial Frailty in the UK

Posted on May 24, 2012

Last week I attended my first bloggers' breakfast.  With such rapidly gained acceptance amongst the blogger community (this is only our third blog), I felt naturally inclined to devote my next blog to it.

Actually it was a very worthwhile and relevant event, hosted by CUNA Mutual.  The main purpose of the event was to release the results  of research into financial frailty in the UK, and in particulars the degree to which we as a nation are exposed to the risk of loss of income through I'll-health.

The research indicated that 77 per cent of people have no insurance to cover loss of income, and that within six months of losing employment income 56 per cent of the population would be in financial difficulty.  The frailty is greater for young people, with 30 per cent of under 24s indicating that they could only survive for one month without their normal income.

All of this reinforces the need for proper planning against financial frailty.  For a start, most people who have sick-pay from work don't know how much or for how long it will pay out, let alone what to do about a shortfall in their income.  It is clear that as an industry, insurers are poor at highlighting the risks and of encouraging people to take action to protect themselves.  In particular, people are wary of products with features they don't need, a price they can't afford and with too great a prospect that it won't pay out.

In response, CUNA Mutual has launced a new Income Protection Product, to suit the needs of the building societies and credit unions they work with.  

It seems to me that Holloway friendly societies also have many of the answers, with products suited to blue collar workers and the self-employed, and who constantly report that over 95 per cent of claims are paid.   It has been encouraging to be involved in work to support the government's commitment to 'Simple Financial Products', where the group looking at a simpler form of income protection product have more than once explored the merits of Holloway income protection, in identifying a design that willappeal to people.

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Last week I wrote about 'Mutuals making a difference'.  This week I received news from MGM Advantage about their latest initiative to do just that... which also suggests they have excellent income protection arrangements at work.

MGM Advantage, the retirement income specialist, is looking to enter the official Guinness World Records by attempting the most sky dive tandem jumps in one day, in aid of Alzheimer’s Society.  The current world record is 130 tandem jumps in one day and the company is looking to beat that and get 180 people to jump.

One in three people over 65 die with dementia, so this is a very worthy cause.  If you would like to make a donation please go towww.virginmoneygiving.com/team/mgmadvantage.