ProtectionMay 2 2013

Protecting income in good years helps in bad: L&G

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BySimoney Girard

The managing director of Legal & General Retail Protection, said it was crucial that people made contingency plans to protect their income during the good years, adding: “One of the major causes of debt issues can be suddenly and unexpectedly losing your job.

“Obviously unemployment has a huge effect on all aspects of life, including the affordability of accommodation. Having a contingency plan in place provides both peace of mind and financial security should the worst happen, so it is important that people consider their financial commitments carefully and make appropriate arrangements to cover those commitments in the future.

“Insurance cover, such as income protection, is one option when it comes to forward financial planning and can help alleviate some of the stress that accompanies sudden unemployment.”

His comments followed news from housing and homelessness charity Shelter, which cited a 40 per cent rise in the number of people asking for help with housing costs and arrears.

Campbell Robb, chief executive of Shelter, said in the past six months alone, visitors to Shelter’s online housing advice page have doubled.

The data also revealed that those who are currently struggling to pay rent or mortgages have few options for increasing their incomes, with just 21 per cent saying they or their partners were able to get extra hours at work.

Only 26 per cent said they could get a second job, while in March, the charity reported that almost a third of people have already cut back on food in order to pay housing costs.

Mr Robb said: “There is a frightening lack of options available to people who are fighting to keep a roof over their heads. Sadly, with little remaining of the housing safety net meant to support them in tough times, many can quickly find themselves at risk of losing their homes.”

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Roy McLoughlin, principal of London-based Master Adviser, said: “People have to establish what their position is with their employers.

“Sometimes 8-10 per cent of employers have it, leaving 8 out of 10 people without any form of cover.”