Half of parents lack any financial protection
Published ¤ 28/10/2011 15:26:31
UK families are putting themselves at huge risk by failing to take steps to secure their financial future, reports Moneyfacts.
Over half (52%) of parents with dependant children have no financial plan in place, leaving their families at the mercy of events such as job losses or ill-health.
Just half of parents have some type of life insurance cover in their plans to financially support their children.
Worryingly, just a fifth of people without life cover said they recognised that their financial approach could put their family at risk if something unforeseen were to happen.
Just 18% of parents plan ahead for unforeseen medical expenses, while retirement planning actually becomes a lower priority when people have children; 67% of childless adults have retirement finances in place, falling to 56% of those with children.
And despite 81% of parents aspiring to pass on wealth to their children when they die, tax and inheritance planning are overlooked by most.
A concerning 65% of parents in Britain have not made a will while just 27% of adults with a child have a plan for passing on their inheritance.
"The fact that such large numbers of households are not planning ahead is leaving families greatly exposed to unforeseen events," said Christine Foyster, head of wealth development at HSBC.
"Protecting the household's financial assets during parents' working lives will not only ensure that families can cope if there is a change in circumstances, but should also be seen as an important part of preparing for retirement.
"It is crucial that parents the world over act now to secure their families' future - and financial services providers must do as much as possible to help people make provisions for every eventuality."
This article was originally published by Moneyfacts, 26/10/2011.
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