What the BoE's forecast means for you

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When the UK's GDP rate drops from an already unremarkable 0.4 per cent growth in December 2019 to a projected 14 per cent drop for the year, you can bet we are in for a bumpy ride. 

Amend that: not so much bumpy as downright alarming. The Tower of Terror ride. 

Of course, the Bank of England caveated this estimate by saying it was an "illustrative scenario", but a shocking scenario nonetheless; should this come to pass – as is more than likely – it will be the worst slump in 300 years. 

Property prices are also estimated to fall 16 per cent and 2m people will lose their jobs. 

Accident, sickness and unemployment cover is often seen as the snaggle-toothed distant cousin of more comprehensive protection plans, but what a decent safety net a product such as this would have provided for thousands of people who stand to lose their jobs – and perhaps their rented or mortgaged homes – as a result of the recession.

Cash savings have been sneered at for their lowly returns and potential to become eroded by inflation, but what a stream of readily-accessible money this could provide for thousands of people needing something to tide them and their small businesses over for a few months.

Paying into a workplace pension has been seen by some workers as just another expense biting into their income, but what a salvation the employer contributions and tax-efficiency of such a product will prove to be for people as they enter retirement over the next few years. 

Those smart alecs boasting of high returns from crypto and similar high-risk strategies have suddenly gone quiet across social media. Now, ordinary people are going to need long-term, diversified portfolios and sensible advice to steer them through this storm.

What the BoE prediction means for you is an opportunity to take these frightened people and give them the protection, pensions, savings and investment strategies they will need so they can shore up their businesses, protect their livelihoods, pay their bills and keep their homes, all the time knowing their trusted adviser is right beside them on this wild ride.

Simoney Kyriakou is editor of Financial Adviser