Over the last year, redundancies and illness have brought a challenging reality check for many people who have had to make ends meet via state benefits, with universal credit providing as low as just £342.72 a month.
Without a financial safety net, the precarious state of the economy, as well as rising employment rates, can spell disaster for many people caught up in waves of redundancies as the furlough scheme is set to end in September.
By setting up a means of income or some extra security in the event of a difficult situation, you can ensure that you are able to pay essential bills and maintain your living standards if redundancy was to occur. It is also important not to forget that unexpected accidents and illness do happen, so creating a safety net is essential.
Setting Money Aside
The pandemic has shed a light on just how easily and quickly seemingly secure jobs can disappear after economic disruption. This means that saving money and putting it aside “for a rainy day” is hugely important to cover any important bills that you will need to pay in the event of becoming unexpectedly unemployed.
Depending on your individual circumstances, the level at which you are able to save can vary. However, it is a good idea to ensure that around three months of essential bills are covered, and you can build this up by planning to put small amounts of money aside regularly to help create a financial safety net.
It is also a good idea to consider where you place these savings. Interest rates are currently low, but it can make a difference to explore a few different types of saving accounts.
Think About Insurance
When it comes to creating a financial safety net, savings is always a good place to start. However, insurance is an essential tool to protect you and your family against the financial consequences of death or serious illness. This can help your family receive an income to pay off any potential debts or mortgage you leave behind.
You should also consider income protection insurance, which can help provide valuable, much-needed financial support if you are unable to work due to illness. Given the current climate, this is hugely important to help protect both you and your family from financial difficulties as much as possible. It is important to remember that statutory sick pay is only £98.85 a week for up to 28 weeks.
KLO Financial Services
If you are looking to create a financial safety net and you would like to explore your options regarding savings and/or protection insurance, our team of independent financial advisers are on hand to support you with any questions you have.
We can help you choose the right level of cover, as well as a strategy to help you build the best safety net in case of an unexpected event or illness.
To speak to a member of our team, call 01926 492406 or email email@example.com.