Parents look to make whatever savings they can as cost of raising child rises 3.3%
Cash-strapped parents are being warned that cutting back on the amount they spend on vital protection cover may help household budgets in the short-term but could have “catastrophic” implications overall.
Research published this week shows that the rising cost of childcare, education and food means that the overall cost of raising a child has increased 3.3% in a year. As a result, over three-quarters of parents are making cutbacks to the family budget, while two in five parents have reduced the amount they regularly save.
The rising costs are thought to be behind the fact that only a third (32%) of parents have life cover in place.
The annual Cost a Child Report from protection and retirement specialist LV= shows the cost of raising a child from birth to their 21 birthday now totals a record £218,024. This equates to £10,382 a year, £865 a month or £28.44 a day.
The survey of more than 2,000 parents suggests that while costs of childcare and education have gone up, some expenditure has decreased since last year as three-quarters of parents (76%) look at ways to cut back, with spending on hobbies and toys down 5%.
Mark Jones, head of protection at LV=, said that while many parents are seeking out “savvy” ways to ensure they can still afford their children’s higher education prospects, with tuition fees increasing this year he expects to see more parents making “significant” cut backs across the family budget to accommodate this.
But he said that with mounting financial pressures, many families are reducing the amount of savings and protection they have in place. Two in five (43%) parents trying to decrease their spending have cut back on saving and reduced the amount they are putting away. A further 22% have cancelled or reviewed their insurance policies to try and save money.
Jones said that when considering ways to ease the family budget it is important that parents keep in mind the long-term picture.
“Cancelling life cover or income protection, for instance, as a short-term measure to save money can have catastrophic implications if either parent were unable to work or weren’t around in the future,” he said.
Free on advice on income protection
Thursday 26 January 2012
Tuesday 17 January 2012
Protection timebomb ticking as consumers spend all of their salary or more
Cash-strapped individuals urged to cut back on 'here and now' spending
Cash-strapped consumers could be in much worse financial shape if they keep spending on the here and now and fail to provide an adequate money safety net should the worst happen and they fall seriously ill, it has been claimed.
Protection provider Bright Grey said that research which shows that a third of British adults have nothing left from their monthly salary or are in debt underlines individuals’ financial vulnerability in the face of sickness or illness.
The provider’s Financial Safety report suggests that one in three (33%) of adults spend more than their salary or just about manage to break even each month. Over 11 million British adults (23%) just about match their outgoings to their net monthly salary, with nothing leftover at the end of the month. Some 4.9 million (10%) spend more than their salary on a regular basis.
Last year research carried out by Swiss Re suggested that consumers are more aware of their lack of financial protection but remain more focused on reducing their levels of debt than ensuring they have adequate levels of protection in place.
Swiss Re’s study argued that the economic downturn has resulted in a shift in consumer awareness towards the need for greater self-reliance and financial protection. However, consumers are delivering an "austere self-assessment of their financial exposures", Swiss Re said, resulting in a "never-ending circle of uncertainty".
While Swiss Re’s research suggests that affordability is a "fundamental" barrier to consumers taking out life insurance, Bright Grey’s research suggests that consumers spend an average of just £30 per month on protection cover out of an average monthly spend of £1,315. Bright Grey said in comparison, consumers spend £56 on telephone bills and £232 on supermarket and other forms of shopping.
Roger Edwards, proposition director at Bright Grey, said it is a “false economy” to believe that just spending on the here and now is going to keep Britons “in good stead”.
“By cutting back slightly on some of their outgoings, most adults should be able to find a small amount of money to help provide the ‘financial safety net’ they may need in an emergency situation,” Edwards said.
Individuals’ potential financial vulnerability was also revealed last year when a survey for CLIC Sargent, the children's charity, said that the unexpected costs of travel, childcare, food and accommodation while their child has treatment for cancer means that 66% of parents have to turn to borrowing to make ends meet.
CLIC Sargent’s research showed that three in five (58%) parents of children with cancer said they had to reduce the number of hours they worked, while a small but significant number (6%) said they had turned to high interest, short-term payday loans to cope with the additional costs.
Free financial review by The Insurance Service
Cash-strapped consumers could be in much worse financial shape if they keep spending on the here and now and fail to provide an adequate money safety net should the worst happen and they fall seriously ill, it has been claimed.
Protection provider Bright Grey said that research which shows that a third of British adults have nothing left from their monthly salary or are in debt underlines individuals’ financial vulnerability in the face of sickness or illness.
The provider’s Financial Safety report suggests that one in three (33%) of adults spend more than their salary or just about manage to break even each month. Over 11 million British adults (23%) just about match their outgoings to their net monthly salary, with nothing leftover at the end of the month. Some 4.9 million (10%) spend more than their salary on a regular basis.
Last year research carried out by Swiss Re suggested that consumers are more aware of their lack of financial protection but remain more focused on reducing their levels of debt than ensuring they have adequate levels of protection in place.
Swiss Re’s study argued that the economic downturn has resulted in a shift in consumer awareness towards the need for greater self-reliance and financial protection. However, consumers are delivering an "austere self-assessment of their financial exposures", Swiss Re said, resulting in a "never-ending circle of uncertainty".
While Swiss Re’s research suggests that affordability is a "fundamental" barrier to consumers taking out life insurance, Bright Grey’s research suggests that consumers spend an average of just £30 per month on protection cover out of an average monthly spend of £1,315. Bright Grey said in comparison, consumers spend £56 on telephone bills and £232 on supermarket and other forms of shopping.
Roger Edwards, proposition director at Bright Grey, said it is a “false economy” to believe that just spending on the here and now is going to keep Britons “in good stead”.
“By cutting back slightly on some of their outgoings, most adults should be able to find a small amount of money to help provide the ‘financial safety net’ they may need in an emergency situation,” Edwards said.
Individuals’ potential financial vulnerability was also revealed last year when a survey for CLIC Sargent, the children's charity, said that the unexpected costs of travel, childcare, food and accommodation while their child has treatment for cancer means that 66% of parents have to turn to borrowing to make ends meet.
CLIC Sargent’s research showed that three in five (58%) parents of children with cancer said they had to reduce the number of hours they worked, while a small but significant number (6%) said they had turned to high interest, short-term payday loans to cope with the additional costs.
Free financial review by The Insurance Service
Wednesday 4 January 2012
Employee absence soars following introduction of fit note - FirstCare
GPs 'stuck in old habits', absence management specialist claims
Employee time off work may have doubled since the introduction of the fit note, the replacement system for the traditional sick note introduced in 2010, according to the UK's largest absence management specialist.
A study carried out by FirstCare suggests that workers who went to their GP for a fit note were absent from work for 48 days on average, compared to 20 days for those who did not apply for one.
FirstCare said it has carried out an analysis of 22,086 employee records which found that the majority of GPs continue to sign off employees sick for lengthy periods of time. The fit note had been introduced in order to enable doctors to say what an employee is well enough to perform, as opposed to simply saying whether they can be at work or not at all.
James Arquette, a director at FirstCare, said the system "causes employees to be off work for longer without reducing the likelihood of repeated absence".
FirstCare’s analysis chimes with findings from a survey carried out last year by the Chartered Institute of Personnel and Development and Simplyhealth which suggested that just 11% of business said the fit note had cut absence. The CIPD/Simplyhealth survey of 592 organisations also found that just under a third (31%) agreed that the fit note helps line managers to manage absence more effectively.
Consider Group Accident and Sickness Policies.
Employee time off work may have doubled since the introduction of the fit note, the replacement system for the traditional sick note introduced in 2010, according to the UK's largest absence management specialist.
A study carried out by FirstCare suggests that workers who went to their GP for a fit note were absent from work for 48 days on average, compared to 20 days for those who did not apply for one.
FirstCare said it has carried out an analysis of 22,086 employee records which found that the majority of GPs continue to sign off employees sick for lengthy periods of time. The fit note had been introduced in order to enable doctors to say what an employee is well enough to perform, as opposed to simply saying whether they can be at work or not at all.
James Arquette, a director at FirstCare, said the system "causes employees to be off work for longer without reducing the likelihood of repeated absence".
FirstCare’s analysis chimes with findings from a survey carried out last year by the Chartered Institute of Personnel and Development and Simplyhealth which suggested that just 11% of business said the fit note had cut absence. The CIPD/Simplyhealth survey of 592 organisations also found that just under a third (31%) agreed that the fit note helps line managers to manage absence more effectively.
Consider Group Accident and Sickness Policies.
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