Life is unpredictable, and an illness or injury could mean time off work, affecting your ability to pay essential bills, including your mortgage. A recent survey by Cirencester Friendly found that 56% of people wouldn’t know what spending to cut if they lost their income due to illness or injury. This raises an important question:
Have you got the necessary protection in place?
Would You Struggle Without an Income?
Only 44% of people could identify areas where they could reduce spending, with popular cutbacks including takeaways and TV subscriptions. Others mentioned reducing clothing purchases, gym memberships, smoking, and drinking.
However, worryingly, 3% said they would have to cut back on heating first, showing how little financial flexibility some households have. With 27% of people having taken a month or more off work due to illness or injury, not having a financial plan in place could put your mortgage payments and essential expenses at risk.
Have You Got the Right Protection?
If you were unable to work, would you be able to cover your mortgage and bills? Many assume savings or sick pay would be enough, but this isn’t always the case. Income protection can provide financial security, covering a portion of your salary if you’re unable to work. Similarly, critical illness cover offers a lump sum payout if you’re diagnosed with a serious condition. Reviewing your existing policies or setting up new cover could make all the difference in difficult times.
Planning Ahead & Reducing Costs
Even if you’re financially secure now, it’s important to plan ahead. Start by reviewing your monthly budget and identifying any unnecessary expenses that could be cut back in the event of illness or injury. Building an emergency fund with enough to cover three to six months’ worth of expenses can provide a safety net if things go wrong. Additionally, checking your protection policies and ensuring you have the right insurance in place will help you avoid financial issues during challenging times.
Protecting your home and financial future starts with preparation. Get in contact today to discuss your options.
Source: Mortgage Intelligence March 2025
Feature Photo by Mikhail Nilov / Pexels