The need to protect your income is more important than ever – yet just two in every 10 UK adults take out income protection, according to respected UK consumer organisation Which.co.uk.
Established Staffordshire Moorlands based GRN Financial Services advise that, while financial markets are currently volatile, income protection should be considered by everyone to ensure people can pay their mortgages.
“Awareness of the availability of income protection insurance is incredibly low, yet it can be vital, especially for home owners with a mortgage,” said Tom Gronkiewicz. “Ask yourself, how you would pay your monthly bills if you suffered long-term ill ness or injury?
“Statutory sick pay is £99.35 a week for up to 28 weeks, while a Lloyds Bank survey revealed the average UK monthly mortgage payment is just over £750.
That’s before we factor in potential interest rate rises due to turbulence in the UK and global economies. Then, of course, you have your utility bills and everyone is aware how much gas and electricity prices are rising this winter.
Tom, who is a Director of Bath Street, Leek, based GRN Financial Services, together with his wife, Aga, added: “People need to be made more aware of how they can protect their financial future. Many people, quite rightly, take out pet insurance or holiday insurance, but they don’t protect their income.
“The reality is, not many employers will keep supporting you if you are off work for a longer period of time.
“Independent consumer affairs site Which?* states “the one protection policy every working adult in the UK should consider is the very one most of us don’t have – income protection.”
“People takng out income protection will pay a monthly premium and this is assessed depending on your personal health. It’s generally around £1 to £2 a day and you can expect a monthly pay out of around 70% of your salary.”
GRN is currently the only mortgage broker with premises in Leek town centre, and the owners believe it’s important to keep that town centre presence for customers at a time when many banks are retreating from towns.
“We ensure the office is staffed each week day and are passionate about working with fellow Leek businesses,” said Aga, a mortgage specialist. “I see it as important that people have somewhere where they can drop in to discuss their financial options and Leek is our home town.”
Offering advice on the mortgage market, Aga said: “It’s important that people realise that, despite recent turbulence, they still have options. Following the recent mini-budget, we saw mortgage products fall in availability, but the lenders have returned and there’s a great selection of mortgages now available again.”
“It should be remember that they have been very low in recent years. The average interest rate in 1990 was 10.13 per cent, falling to just under 7 per cent by 1998. Of course, house prices are very different now.
“The real factor is always affordability. If you plan to buy a home, mortgage brokers will be able to search the market and find a way forward for you.”
ENDS
*which.co.uk (money), August, 2022.
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