How important are financial safeguards for the future?

POSTED: 11th March 2013
IN: Personal Guides

It can be easy to get carried away by the financial demands of adult life, whether that is monthly mortgage repayments or making the most of a cash ISA allowance.

undefinedHowever, young adults also need to be aware of the importance of safeguarding their futures, not only by ensuring they are saving regularly, but by considering the benefits of insurance.

Research from Bright Grey recently revealed 25 per cent of 25 to 40-year-olds take a 'live for the day' approach to life, with 33 per cent failing to put aside savings. 

Furthermore, 43 per cent of respondents ranked mortgage repayments as their main priority, followed by finding a job that interests them and planning their next holiday.

While it is highly important for young people to prioritise their mortgages, they should also think about how they would cope in the event they suffered a sudden loss of income.

Some 16 per cent of people questioned in the Bright Grey study said they were aware of the importance of insurance but could not afford it.

However, they may need to reevaluate their priorities as 21 per cent think funding a social life is a main priority.

Income protection, for example, will help to ensure they have enough cash to tide them over if they suffer a loss of income, which could keep them financially afloat at a difficult time.

Head of marketing at Bright Grey Jacqui Gillies said: "People sometimes think of insurance as an unnecessary expense, and take the 'it won't happen to me' approach.

"Aside from allowing people to continue with hobbies or maintain an active social life, insurance can help them to meet their financial obligations like mortgage payments or rent."

As people get older, they often find their financial obligations increase, so it is important for young people to think about their future expenses and the type of cover they will need to protect their investments. 

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