If you’re a homeowner, your mortgage payments are likely to take up a large part of your income each month. But if you became seriously ill or injured, and unable to work, would you be able to keep up your mortgage repayments? As buying a home is likely to be your biggest investment, it pays to protect yourself, so you’re covered should a life changing event occur.
We know the little things in life can be life-changing. It could be a phone call from the doctor with serious news about your health, or a stepladder that wobbled once too often when you were standing on it – serious illness and injury can happen when we’re least expecting it.
In fact, each year, one million workers find themselves unable to work due to serious illness or injury. And while many people would say they would rely on their savings to get by, on average UK households would only be able to survive on their savings for 19 days.
Have you ever thought how you would pay your mortgage if you became ill or injured and unable to work?
Buying a home is likely to be your biggest investment, so there is a need to safeguard it against loss of income because if you can’t work and pay your mortgage it could mean losing your family home.
There are several different types of insurance available which can provide financial protection. These include income protection which provides a monthly income if you’re too ill to work and critical illness which pays out a tax-free lump sum if you’re diagnosed with a specific serious illness or injury.
Protecting yourself with either income protection or critical illness insurance provides you with a crucial safety net to fall back on if you are unable to work because of illness or injury.
It will be a huge relief to you and your loved-ones to know that you will still be able to pay your mortgage and other essential bills if you are too ill to work, leaving you to focus on what’s important – getting better.
Here’s one little thing you can do to protect your financial future, so get in touch with an adviser from Downton and Ali today.
Your different options can be discussed with your adviser – so you can make sure you have the right protection in place for you and your family. Contact us here.
Approved by The Openwork Partnership on 04/07/2023.
Expiry date – 04/07/2024
What is business protection insurance and how does it work? Find out why it could be right for your business.
If you own or run a small business, protecting it is always a priority, especially if something were to happen to a key member, which could affect the financial health of the company. In this situation, business protection insurance could provide some peace of mind.
What is business protection?
Business protection provides coverage in the event that a director, business partner or other key employee of your business suffers a critical illness or long-term disability or passes away. It’s a way of protecting the business and ensuring continuity. Business protection can help support forward planning in terms of succession and gives you ways to provide stability during what could be an uncertain time, especially if the company is small.
What are the types of business protection?
Business protection insurance usually offers cover in three ways:
- Key person protection
This protection provides cover to replace key staff and cover income lost by their absence that could affect the business. It can cover any key employee from a head of department to the CEO. - Business loan protection
This protects the business by helping to repay business debts like a loan or bank overdraft if the owner or a key member (like a partner) dies or suffers a critical illness. - Shareholder protection
This cover is also known as ‘ownership’ or ‘partnership’ protection. It specifically covers the business owners if a shareholder dies, or suffers a critical illness, by ensuring that funds will be available to buy shares from the deceased shareholder’s estate.
These three forms of business protection also come with the option to add critical illness cover if you think it necessary. You could also get coverage for more than one person within the business. It’s always important to speak to an adviser who can help you figure out the right type of business protection for your business and any extra coverage (like critical illness) your business and employees could benefit from.
What are the benefits of business protection?
One of the benefits of business protection is the knowledge that should anything happen to a crucial member of the business, or someone with a financial commitment within the company, there would be some protection financially. It also gives other members of the business some peace of mind knowing this. Business protection can protect any loans or mortgages tied to your business, too, meaning lenders (knowing that you have business loan protection in place) are less likely to refuse a future loan, and will not approach the guarantor of a loan or their estate to recoup any existing loans.
In a small business that relies on a few key employees, the risk to the business from a financial point of view might increase if one of the team were unable to contribute because they die or are critically ill. In that situation, business protection is a wise plan to have in place.
An adviser can help you find out which type of business protection plan works for you and your company.
In 2020 we’ll have been in business for 20 years! To celebrate, each month we’re sharing 20 top tips about topics that are closest to our heart. Our aim is always to provide you with the best possible information so you can make informed financial decisions. This month we’re talking about how our home buying team of estate agents, mortgages advisors, and solicitors can help take the stress out of moving.
20 Reasons to Find Your Dream Home in 2020
There are many excellent reasons to move home and 2020 might be the year for you to finally take the plunge – despite the pandemic – to find the perfect dream home. Downton and Ali Financial Advisors can help you assess if now is the right time for you.
Life-stage Changes Are Still the Biggest Reason Behind Property Buying
While property buying can be stressful, the factors that drive it remain the same. When major life-stage changes beckon, moving to a new property is often the best solution to make your lifestyle viable. Some can be postponed, and others are not so easy to delay. If any of the following life-stage changes are happening to you in 2020 then there really is no reason to hesitate in buying a new property.
- The Upgrade – Whether spurred on by a growing family, the need for guest rooms or just being able to afford a more luxurious home, upgrading to a larger property will make most of us move at some point in our lives.
- The Downsize – When the kids leave home, sometimes all that upgraded space becomes unutilized space. Smaller homes can be easier to manage and in later life, a downsize can save money and time on home maintenance.
- The New Job – One of the common reasons for moving home is accepting a new job opportunity in a new location.
- The First Venture onto the Property Ladder – Having rented for some time, eventually most people crave their own home. There is more stability in owning your property. It could be a good investment for the future and it gives you the freedom to create the home you really want.
- The Schools – If you have a child, you’ll know how important it is to live in the catchment area of a good school. This might mean you have to move to get yourself into the best position to have your children accepted at the school you want.
- Divorce or Relationship Breakdown – Unfortunately, divorce and relationship breakdown are common impetuses for buying a new property.
- Retirement – Retirement can prompt a move, perhaps to be nearer family, or to a bigger property thanks to the accumulated wealth in a pension or to a home in a new area that offers a more relaxed pace of life. It can be a downsize or an upgrade depending on the lifestyle you want to enjoy in your golden years.
The Pandemic is Driving a Desire to Move Home
2020 may have become the year to move for many more people because of Covid-19. The pandemic has changed circumstances and lifestyles for most of us. Some feel this shift more than others, and it is unclear how long the effects will be. It has caused large numbers of people to reassess their living situation and consider a home move this year.
- More Interior Space – If there is one thing lockdown taught us, it’s that space is a premium. You didn’t know how small your current property was until you couldn’t leave. Desiring more rooms for privacy in a crowded family home or larger more luxurious rooms is a natural reaction. This has already been a major driving force for home moves in 2020.
- Gardens – In addition to interior space, the desire for gardens has increased dramatically. You may not have thought you were at the stage in your life where a garden was necessary. A 4th floor flat seemed fine for your lifestyle. Yet suddenly, when you had to spend all summer at home due to Covid, that feeling changed. It’s been a wake-up call for many others as well. 2020 is the year many people decided they needed a house with, at least, a small garden.
- Countryside Access – Similarly, many people abruptly decided this year that getting away from the city was a must. It doesn’t take much sleuthing to understand that Covid is going to spread more easily in crowded cities. The virus spreads less easily outside, in wide open spaces. Going on solitary nature walks is one of the few truly safe activities these days, so it is little surprise people are swarming to buy new homes outside of city centres in 2020.
- Reunite with Family – Pre-Covid a car or good train links meant you didn’t need to live near family to see them often. The pandemic changed all that. Going for a quick, safe socially distanced garden visit is easy if you live around the corner. In those circumstances, you can easily visit older or more vulnerable relatives without harming them. However, if you live hours away, Covid has made seeing your family safely more difficult. Wanting to be nearer family has often been a motivation for moving but the virus has sped up the timeline for many.
- A Better Digital Life – The internet was already an increasingly prominent presence in most of our lives. Thanks to lockdown and Covid, it came to play a much bigger role in many more people’s day to day existence. It was transformed from simply a life enhancement to a necessity, and not just for work. It became everyone’s primary source of communication and entertainment almost overnight. Although, as many crackly, frozen Zoom conferences have revealed, the internet was not created equal everywhere. Some parts of the country have slower internet and less optimal connections. While some are desperate to move to a remote farm in 2020 to avoid the pandemic, others are lamenting their rural patchy internet connection. Choose your locations wisely.
- Safety – The end of lockdown meant back to business as usual for plenty of people, yet not everyone has the luxury to be carefree. Older people, and thousands of young, working age people with asthma, cystic fibrosis, diabetes, immune disorders and other health concerns, now don’t feel safe out in the world. If you are at higher risk from Covid and live in a densely populated area, the desire to move in 2020 may be due to a desire for greater safety.
- More Choice – The pandemic has shifted our culture and one key change is in the way we work. Not only did lockdown force many to work from home, it also showed employers that a large proportion of us could work from home and easily do our jobs. The more that remote working is embraced, the larger the pool of talent which companies have to choose from, and the more choices home buyers have. With remote working increasing, you aren’t tied to a specific location for your career, and have a greater choice when it comes to where you want to live. One of the very few silver linings of the pandemic.
- Second Homes – If you have the capital, a holiday home has always been a popular choice. Whether it’s a holiday cottage in the country or a townhouse in a chic city, a second home can be a great lifestyle improver. In 2020 buying a second home within the UK became a lot more appealing. The popularity of the “staycation” exploded, as travelling abroad looked riskier and more fraught with difficulty in a post Covid world. Particularly remote second homes away from busy populated areas are seeing a peak in interest.
- Stamp Duty – Initially the pandemic had a negative impact on the property market. Potential future lockdowns will also make key aspects of the buying process challenging. To combat this the government has suspended stamp duty in England and Northern Ireland on properties up to £500,000 until March 2021. This has already influenced people and may create a surge in house buying in the latter half of 2020. Listing viewings on sites like Rightmove were up by 22% in the wake of the announcement.
Other Unexpected Benefits of Moving
- Cheaper Cost of Living – It’s common knowledge that some areas of the UK are just more expensive to live in with the cost of travel, house prices, groceries, bills, and more all playing a factor. Moving to a less expensive area can improve your quality of life and enable a more affluent lifestyle by reducing the cost of living. It is one reason why many move out of London as the necessity to work in the capital lessens.
- Swapping to a New Build – Moving from an older property to a new build can bring many unexpected benefits. New builds tend to be more environmentally friendly, cost effective when it comes to energy and bills, and designed around modern living. For example, new builds often follow more of an open plan aesthetic, which is better for high quality, strong wi-fi, as thick walls and old chimney breasts interfere with the signal.
- Undesirable Change to Your Area – Thingschange, it’s a fact of life. It isn’t only your life-stages that change but a location can change. Increasing urbanisation, more house building, a slow cultural shift in the types of leisure, shops, and jobs around you can all go into changing the character of a neighbourhood or town. You may find a multitude of the reasons that you loved a place have vanished and it is time to find those qualities somewhere else.
- Downton & Ali’s Home Buying Team – While 2020 might be the right year for you to move, the pandemic might make the process feel more stressful. Luckily, our home buying team can make property buying easier for you.
We have created a one-stop-shop for property buyers. This removes much of the painful research and admin that comes into property buying. We’ve crafted a team of knowledgeable property specialists to take you through the whole process.
We will give you access to our top Estate Agent, Scott to help you find your dream property.*
Finally, the solicitor, Joan is on hand for your conveyancing needs.*
Thanks to the Home Buying Team, finding a new property in 2020 just got easier. Contact us to get started.
Your home may be repossessed if you do not keep up repayments on your mortgage.
*The services promoted here are not part of the Openwork offering and are offered in our own right. The Openwork Partnership accept no responsibility for this aspect of our business. These services are not regulated by the Financial Conduct Authority.
In 2020 we’ll have been in business for 20 years! To celebrate, each month we’re sharing 20 top tips about topics that are closest to our heart. Our aim is always to provide you with the best possible information so you can make informed financial decisions. This month we’re talking about why we believe it’s wiser to improve your home rather than move in 2020.
20 Reasons to Renovate Rather Than Move in 2020
Upgrading your property is one of the biggest financial decisions in most people’s lives. Both renovations and moving involve a substantial investment.
2020 is not only our company’s 20-year anniversary, it has also been a year of significant change and financial uncertainty for most of the country. COVID has caused a global impact. In addition, the UK was already battling with the implications of Brexit. This combination of factors has caused major disruptions to the housing market and many are realising that improving your current property is a safer investment than moving.
We understand it can be a difficult decision to choose between renovating or moving, especially if you recognised during lockdown that your current home is no longer working for your family. However, Downton & Ali’s experts can assist you in making the right decision. In fact, we have 20 very compelling reasons why we believe you should improve rather than move in 2020.
Selling & Buying Property Has Always Been a Challenging Experience
- Housing shortages – It’s no secret that for several years the government has been aware of a severe shortage of affordable housing. This is especially true in desirable areas. If you’re looking to move, you may not be able to find a suitable property in the right area for your budget.
- Stamp Duty Uncertainty – The recent stamp duty rates cuts in response to COVID have only been promised up until March 20211. Prior to COVID they had risen in the wake of Brexit and we’re likely to see this trend again.
- Stress – Buying, moving and selling aren’t for the faint-hearted. According to a survey, 70% of participants cite the process of moving home as the most stressful life experience there is, worse than divorce or having a child!2
- The Double Impact – We don’t deny that renovations or improvements can be more than a little stressful too, yet a large proportion of moves also involve building works at the new property. You may need to opt for a house that’s less than perfect and requires work. This results in a move and a building project at the same time which can be daunting.
- The Financial Cost of Upgrading – In many cases a move is prompted by a desire to upgrade. While downsizing does happen, most people desire more space and to live in a better area. Upgrading from flat to terrace or terrace to semi or detached can come at a financial loss if the property you sell is worth less than the one you want to buy.
- Attachments – Moving isn’t just stressful because of the legal and financial implications. There’s also an emotional impact. If you’re moving far from your previous property it can mean uprooting a career, disrupting children’s schooling and losing social connections you’ve built up, possibly over years. This can be lonely, and it can also take time for a new property to feel like home. 50% of those surveyed cited this as a reason not to move.3
The COVID Pandemic Had Made Property Buying Even More Stressful
We know it’s a gloomy subject, but the unfortunate reality is that COVID has and will affect many people for the worse. We aren’t just talking about loss of life. Health, careers, savings and prospects have been thrown into difficult circumstances. The housing market has also been affected.
- Spiralling House Prices – Larger properties, more suburban/rural properties and properties with gardens or land attached are in increasingly high demand due to COVID. People are valuing home and garden space over other, previously desirable, features, such as good transport links or access to facilities, restaurants, leisure etc. Interior and outdoor space are at a premium and this is driving the cost of those properties sky high.
- Fear and Risk – Viewing properties and accepting viewings in your own property increases the risk of contamination from COVID. For those of you who are older or in vulnerable health, this risk understandably can make you think twice about moving, unless it’s absolutely essential. Most renovations can be centred around one area of the house at a time, and the infection risk is, therefore, reduced.
- Career Insecurity – COVID has led to widespread redundancies, failing businesses, and some industries may never recover e.g. the events industry. Job loss and insecurity mean a less financially stable situation for large portions of the population. It’s natural and sensible that you would want to keep hold of your savings.
- Challenges Obtaining Mortgage Loans – Career insecurity doesn’t just mean less income, you might struggle to find a mortgage in the first place. Even if you haven’t lost your job so far, banks and mortgage lenders may fear lending to those in industries especially hit by COVID.
- Mortgage Rates – Mortgage costs had been rising and becoming less affordable before COVID. While a mortgage holiday has been provided by the government, this is only for existing mortgages and is only guaranteed for three months.4
- Rapid Change – Uncertainty and instability are sadly the name of the game in the COVID world. This doesn’t mesh well with the fact that properties can take a long time to sell. Putting your house on the market in these uncertain times invites more risk than normal. The whole financial and property landscape could change by the time you get a decent offer on your house, and your own circumstances could shift dramatically too.
- Hang On to Your Assets – Given job and financial insecurity, it makes perfect sense that you would want to hang onto valuable assets that you already possess, like your current property.
- Keep & Improve Assets For Future Generations – It isn’t just about holding onto property assets for yourself. COVID has most aggressively impacted the careers of the young and many people of working age have been hit hard. Holding onto current property means you can have more chance of paying off your mortgage and leaving guaranteed property assets to children and grandchildren. Renovations will add longevity and value to existing property.
- Accumulate Wealth – With uncertainty comes the desire to save, rather than spend. A renovation usually involves a smaller upfront cost than a property purchase.
Renovating Has Never Been Easier
16) Make Your Money Go Further – Research demonstrates that a renovation, extension or reconfiguration can be more cost effective than a move.
17) The Right Property Type Could Mean you can easily add an extension. Certain property types make adding extra space much easier and cheaper than moving. If you have a detached or semidetached house, you may be able to build a small rear, side, or attic extension without planning permission.
18) New Planning Laws Make Extensions Straightforward – Relaxed planning laws make it simpler to get planning permission for bigger renovations and extensions in England.5
19) No Chains – The housing market and the buying and selling process is fraught with obstacles caused by your property chain. You usually need to sell your home to have the cash to buy the new home. But what if an offer falls through on your house? What if you are outbid? With COVID, some areas, properties and estate agents are demanding that you have your house on the market before they’ll even let you view. Some even request that you have an offer on your house! If you’re outbid or the sellers change their mind, and your own home sales goes through, where will you go? COVID has made staying with family or renting more difficult in the interim. There are no chains with renovation.
20) Downton & Ali’s One Stop Shop to Improve Don’t Move – We’ve put together a specialist one stop shop to help advise, finance, design and build your home improvement. Our skilled architect, Una, will help you to design a dream home, our very own Brian is on hand to help you finance the build, and then finally it’s over to our talented builder Alan to bring it to life for you.
The decision of whether to move or renovate ultimately comes down to your personal circumstances and choice, but we dedicate ourselves to understanding your individual situations and helping you to reach the best outcome for your needs.
The realities of COVID have made moving far more difficult for many people. Therefore, our experts have devised a way to make home improvements even easier, more successful, and, best of all, more financially beneficial.
Our development of the Improve Don’t Move one stop shop will enable home owners to recognise how to make the most of their property, whether that’s increasing your square-footage, reconfiguring your home, or better utilizing the space you already have.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE The building and Architect services promoted here are not part of the Openwork offering and are offered in our own right. The Openwork Partnership accept no responsibility for this aspect of our business. These services are not regulated by the Financial Conduct Authority.
20 Things You Need To Know About Business Protection
No-one wants to think about dying or becoming seriously ill. But the truth is, if you own or co-own a business and either you or one of your co-owners were to become seriously ill or die, it could lead to serious problems for the revenue and profitability of your business.
Not only could this threaten all the hard work you’ve put into building your business, it could also have a life-changing impact on the people you leave behind.
And the situation is complicated by the fact that the best business protection policy to meet your needs will vary depending whether you need protection against death or serious illness of a sole trader, a business owner or co-owner, or a key employee.
The good news is, with sound planning you can get business protection that covers all eventualities. And regular reviews can ensure that your plans remain suitable for your circumstances even if they change.
Here’s everything you need to know about business protection.
Business Protection – The Basics
- Loss of revenue – If you were to die, or are unable to work because of illness or injury, your business could lose revenue. This might lead to reduced profits or increased losses for your business, reduced income for the owners and their families, difficulties repaying business debts and meeting costs, loss of confidence among suppliers, clients and lenders, and increased costs, for example for recruitment of new staff.
- You need business protection to give you the peace of mind to know your family, staff and company will be taken care of if you die or can’t work due to serious illness.
- Premiums can often be paid in a lump sum or by making regular payments.
- Usually, the insurance is taken out by the business, but it’s best to get advice about setting up and holding the most appropriate insurance to suit the circumstances of your company.
- The cost of the insurance is dependent on factors such as the sum insured, the terms of the cover, the age and health of the insured.
- Usually the premiums paid are not tax-deductible, but the lump sums paid due to death or serious illness are usually tax-free.
The death of a business owner
- If a business owner dies without appropriate measures in place, the future of their business is subject to inheritance law. This means the co-owners might not be able to continue to run the business, and the family of the deceased might not receive financial compensation.
- If you put life policies in place for each co-owner and one of them were to die the other owners would receive a tax-free lump sum that would enable them to buy the deceased owner’s share and continue to run the business.
- This also protects the family of the deceased who would receive the proceeds of the sale.
- If the other owners were to receive the deceased’s share without payment, life insurance in trust is usually needed to compensate the deceased’s family.
Serious illness of a business owner
- If you own a business and become seriously ill, you might not be able to work for a while or, in fact, at all. You need business protection to make sure your company can continue to run in your absence.
- If you have the correct insurance in place, it could provide a lump sum in case you need to sell your share of the business.
- Business protection can also provide the means to cover your income, and some of the costs incurred such as revenue replacement, debt repayment or other expenses.
Key employees
- If a key employee of your company were to die, or to have a serious illness, it could also cause financial damage to your business.
- Key person insurance can be taken out to cover costs incurred by the death or loss due to illness of an employee whose knowledge, skills or overall contribution are important for the financial sustainability of the company.
- Incentives for key employees. Many companies offer insurance as part of their reward packages for key employees. They might offer income replacement or protection cover, for instance, in case they had to be absent from work due to long-term sickness.
- Or they might offer family protection insurance, the proceeds of which would usually be paid under a trust to your employee’s family free of inheritance tax.
Sole traders
- As a sole trader, your death or serious illness could have disastrous financial consequences for you and your family.
- If you take out appropriate life insurance, you can replace the income from your business in the event of your death or if you can’t work due to serious illness.
- You need to plan carefully to ensure you get the right amount of protection to cover the needs of your family. Writing the policy in trust will help ensure funds are paid promptly to your beneficiaries.
If you want to learn more about business protection and receive advice tailored to your personal circumstances, please get in touch.
Click here to download our Business Protection Guide
If you’re thinking of building your own home, financing the project may be high on your list of priorities.
Self-build mortgages are different from normal mortgages. They release funds at stages during the building work, rather than in one lump sum when you complete a property purchase. Some lenders also extend a loan to help you buy your plot.
Types of self-build mortgage
There are two main types of self-build mortgage. With an arrears plan, the funds are released as the various stages of the build are completed. With an advance plan, the funds are released at the start of each stage. The lender will specify what the relevant ‘stages’ in the build are.
Arrears plans are the more widely available of the two. They require you to provide the initial working capital for each part of the project from your own resources, which might be savings or a short-term bridging loan. You are then effectively reimbursed each time by a mortgage advance, although you will, of course, be charged interest on this amount.
With an advance plan, the mortgage can pay for materials and labour in advance. Self-build mortgages only ever cover a percentage of the value of the land or property – around the 75% to 80% mark. So, even if you have an advance plan, you will need fund part of the project yourself.
We’re here to help
As well as assessing the merits of the rebuild or renovation project, banks and building societies will also scrutinise your personal circumstances to determine how much they are willing to lend.
The interest rates are higher than for a conventional mortgage, reflecting the higher risk associated. You will also need to pay arrangement fees, which vary from lender to lender.
Once your project is complete and the property is habitable, you may be able to move to a lower rate of interest for the duration of the mortgage.
As you might expect, there is a lot of administration and organisation associated with a self-build mortgage – which is where we come in. As well as helping you find a mortgage,
we can guide you through the application process, highlighting the paperwork you need to provide regarding permissions and consent, along with other requirements such as insurance and warranties.
No-one should ever undertake a self-build project lightly and the sort of expert, pro-active support we provide can help ensure the success of this kind of endeavour.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
In 2020 we’ll have been in business for 20 years! To celebrate, each month we’re sharing 20 top tips about topics that are closest to our heart. Our aim is always to provide you with the best possible information so you can make informed financial decisions. This month we’re talking about everything you need to know about accident protection.
It’s important to stay active if you want to be fit and healthy. This might mean you head down to the gym a few times a week, or out onto the rugby pitch at the weekend.
Unfortunately, being active also makes you more likely to have an accident or injury. No-one wants to stop you from doing the things you love, but you should make sure you’re protected.
Just imagine for a moment that you had an accident at the gym and were unable to work. How would this affect your life, and that of your family?
We’ve gathered together everything you need to know about accident protection. Here’s how to enjoy your life with peace of mind, knowing you’re covered.
What you should look for in an accident protection policy
- Check which injuries are covered from broken bones to life-altering injuries, it’s important to read the small print.
- And make sure you’re covered for multiple injuries too, just in case. 21% of people who make a claim to MetLife have done so more than once
- Many accident protection policies will cover you if you need to spend time in a UK hospital because of an accident…
- … and some will cover hospital stays due to sickness once you’ve had the policy for a set period (usually 12 months).
- If you travel a lot (or even a little) make sure you get worldwide protection. When you’re on holiday you’re likely to do activities where you could get injured, so it’s important you’re covered at home and abroad.
- Some policies offer additional support that you might not expect, such as wellbeing assistance and other expert resources such as helping with family issues, bereavement and probate, looking after children and elderly relatives, emotional support and help dealing with critical and traumatic incidents.
- No-one likes to think about the worst happening, but it’s good to have the peace of mind to know you’re covered for accidental death,
- …funeral costs,
- …total permanent disability or accidental permanent injury that could have life-changing repercussions for your ability to work or require you to modify your home.
When you might need extra cover
- If you play a lot of sports, investigate active lifestyle cover to provide extra protection for injuries such as torn ligaments, ruptured tendons, and dislocations.
- And if you play rugby, take care. 79% of sports related claims made to MetLife were for non-professional rugby injuries.
- If you’re at risk of certain illnesses, you might also be able to get extra cover. Something to consider if you have a family history of illness…
- …or work in the healthcare sector.
- If you have children, check if you can extend your protection to include them. Some policies will pay you a lump sum, for instance, if your child breaks a bone and you need to take time off work to care for them.
How we can help you with accident protection
- Accident Protection can complement other forms of insurance such as critical illness and life cover.
- Check how much the policy will cost, and if the costs increase if you make a claim or as you get older.
- Not all policies require you to answer health questions when you take the policy out. We can help you make sure.
- We’ll only recommend insurance companies that make it easy to make a claim. You should be able to call, email or write to them.
- And remember, any benefits paid out will be free from UK income tax and capital gains tax, but payments made after the death of the person covered by the policy might be subject to inheritance tax. Tax is based on personal circumstances and subject to change, so we can help advise you according to your circumstances.
- We can help you explore the options to make sure you get the right protection to suit you and your family.
If you want to learn more about accident protection and receive advice tailored to your personal circumstances, please get in touch
In 2020 we’ll have been in business for 20 years! To celebrate, each month we’re sharing 20 top tips about topics that are closest to our heart. Our aim is always to provide you with the best possible information so you can make informed financial decisions. This month we’re talking about insurance and the reasons why you need both personal and business protection.
20 Reasons Why You Need Protection
No-one wants to pay for insurance, but we all have a responsibility to make sure we, our families, and our estate are protected. If you own a business, you should also have protection in case you, one of your partners, shareholders or key employees were to die or were unable to work because of a serious illness.
In this article, we’ll outline 20 reasons why you need individual and business insurance. First, why do you need individual protection?
Individual Protection
- A life insurance plan will protect the people who are dependent on your income if you pass away. The sum they receive can be used to repay debts, provide your family with an income or provide a legacy for their future. We can help you calculate how much money your dependents would need if you died and help you plan a capital sum to provide for your family without incurring any unnecessary inheritance tax.
- A critical illness plan will provide a lump sum if you survive a qualifying serious illness for a minimum period. Advances in medicine thankfully mean more people recover from critical illnesses, but their lives often change profoundly afterwards – for example, they may not be able to work, may have to move to a new house or they may need to replace the income they lost when they were ill.
- Income protection provides the reassurance that you will receive a monthly payment so you can pay your bills and maintain your lifestyle if you can’t work due to sickness or injury. We can help by reviewing your existing provision from private policies or employment benefits and arrange the most appropriate plan within your budget if required.
- Accident protection provides a tax-free lump sum if you have an accidental injury.
- Buildings and contents insurance protects your home and belongings in case of fire, theft, loss or accidental damage. We can arrange a quotation for you, advise about different levels of cover and provide information about protecting your valuables outside the home.
- If you rent out properties, landlords’ insurance can provide protection for your building and contents.
- Landlord’s insurance will also provide a lump-sum if your tenants don’t pay their rent and if your property is left empty during a claim.
- Private client’s insurance is for high net-worth clients. We can arrange one bespoke insurance policy to cover all your general insurance needs. This might be building and contents insurance for several properties, for example, plus cars and even boats or a plane.
- Private medical insurance gives you the reassurance that you will receive assistance if you need access to private medical care for yourself or your family following accident or illness.
- We can help you arrange individual protection by gaining a clear understanding of your background and circumstances, which enables us to recommend custom-designed solutions that suit your needs.
If you’d like to find out more information about individual protection, please click here to download your free guide.
Business Protection
- If you are a business owner and you pass away or are unable to work for an extended period, it could seriously affect the revenue of your business. This could affect your business’s profits, ability to pay debts and meet ongoing costs. It could result in the loss of clients, and loss of confidence from suppliers and lenders.
- This could seriously affect your dependents if they rely on your income.
- These problems can usually be avoided if you have the right insurance, but you need advice about setting up policies depending on the sort of business you have.
- We can help you get the most appropriate insurance depending on the sum insured, the terms of cover, your age, and health.
- If you have a team and any of your key employees were no longer able to work due to death or serious injury, it could affect your business revenue and profitability
- If you are a shareholder or a partner in a business, you should make arrangements in case one of you were to pass away. If you don’t, your business will be subject to inheritance law, which could mean your partners can’t carry on trading and your family might not receive compensation.
- Life policies for each business owner would result in a tax-free lump sum to be paid out if one of them were to pass away, which could be used to buy and run the business. This means the other partners could continue to run the business and …
- … the family of the deceased would receive the proceeds of the sale.
- Even if the business is to pass to a family member without payment, there might still be a need to have life insurance held in trust to compensate other members of the family.
- And if the business is to pass to other partners without payment, life insurance in trust is usually required to compensate the family.
If you’d like to find out more information about business protection, please click here to download your free guide.
No-one wants to think about what might happen if they were to pass away, have a serious injury or accident, or if their property was damaged through loss, theft or fire, but taking some time to make arrangements now will protect your family, estate and business if the worst happens. Contact us for more information tailored to your circumstances.
Being a First Time Buyer was daunting to start with, but once I got in touch with an Openwork Adviser, they settled all my nerves and made the process of buying a place to call home incredibly easy.
The big decision
Before I could look at houses and house prices, I needed to know what I
could afford and how big or small my mortgage and the monthly payments would
be. Due to my low income and the fact I am single, it was a struggle to find a
suitable property within my budget, so I was recommended to look at the Help to
Buy Shared Ownership scheme.
Shared Ownership allowed me to look at good quality pre-owned properties at a good price; I would own 40 per cent and a housing organisation would own the remaining 60 per cent. There were quite a few properties I liked and once I’d viewed them and found the one best suited for me, I sat back down with my adviser and we discussed putting through the mortgage application.
After some waiting, we had the good news that the application was approved. We started to liaise with the solicitors about purchasing the property. This part of the process was long and full of paperwork – a lot of which I didn’t understand but with the help of my adviser, I was able to complete it and get the purchase submitted.
The final step in the process was to receive the best news yet – confirmation of purchase. I was now the owner of a place I could call my own, all that was left to do was to collect the keys and move in.
Protecting my new
home
When it came to protection, even though I have no dependants I wanted to make
sure my income would be protected if for some reason I couldn’t work. The last
thing I would want to risk was the roof over my head that I had worked so hard
to find! Discussing the different protection options available with my adviser
was very helpful to understand which option would suit my needs and my budget.
The policy I went for had the relevant benefits I need as well as being
affordable each month.
Overall, I believe by using a financial adviser, I was able to relax knowing that someone was taking care of everything for me, if there were any issues they’d let me know straightaway. I think if I had gone through this alone I would have really struggled.
Thousands of people with interest-only mortgages expiring this year do not have a repayment plan – putting their homes at serious risk of repossession.
An estimated 81,400 mortgages will come to an end in 2019, totalling around £9.2bn in value, according to the Financial Conduct Authority. A further 82,100 mortgages worth £9.7bn will mature in 2020.
The ins and outs of interest-only
Unlike a repayment mortgage, where the borrower pays off the capital and interest on their loan each month until the debt is cleared, an interest-only loan offers a cheaper monthly premium but requires a single repayment of the capital at the end of the term. Normally this is cleared using the proceeds from a separate investment vehicle.
For example, a £150,000 mortgage at 5% over 25 years would cost £877 per month on a repayment basis, but only £625 per month interest-only. However, the latter leaves the original £150,000 capital debt to be repaid.
Since 2012, anyone taking out an interest-only loan must have a repayment plan in place, and this has led to a drop in the number being sold.
Don’t get trapped
If you have an interest-only mortgage but you don’t have a repayment vehicle in place, it is critical you review your finances as a matter of urgency. Depending on the term left on the mortgage you could set up a repayment plan now, or you could look at switching to a repayment mortgage. This may mean higher monthly repayments, but there are a lot of competitive deals in this current low-interest rate environment.
Another option could be to sell your home and downsize – something that may be possible if older children have flown the nest but nevertheless a difficult decision if you don’t want to lose a cherished family home.
If you are concerned about your mortgage, or you need advice on a suitable investment vehicle, please get in touch.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
On Thursday 2 August 2018 the Bank of England’s Monetary Policy Committee (MPC) raised interest rates by 0.25 from 0.50% to 0.75%.
It’s important to regularly review your mortgage, as it can often make sense to transfer to a new deal – or even a different lender. Your decision to transfer will of course depend on your individual circumstances, and the current rate you are paying.
If your lender plans to increase its Standard Variable Rate (SVR), or already has, moving onto a new mortgage deal could save you money.
To discuss your mortgage needs, please do get in touch.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
For its latest ‘Deadline to Breadline’ report, Legal and General surveyed 2,000 full and part-time workers to assess how long they could survive on savings if their income stopped due to serious, or long-term illness, or death. The rather worrying answer was 32 days.
The research also revealed that just over a quarter wouldn’t have enough savings to last them a week and 30% of UK workers have no financial back-up plans whatsoever – despite the average household debt standing at around £4,600. This lack of preparedness would result in potentially serious financial exposure if things went awry.
UK Protection gap
L&G’s research is important because it highlights just how many people could be gambling with their homes and their family’s wellbeing, by not having a back-up plan. And when you consider that the average UK gross annual salary is £28,677, the support you could expect from the State is not sufficient to provide a reasonable safety net, especially if you are the sole breadwinner.
Statutory Sick Pay can be paid for up to 28 weeks @ £92.05 a week
Employment and Support Allowance @ up to £73.10 a week for the first 13 weeks then up to £110.75 after that (for a single person)
For less than the cost of a daily cup of takeaway coffee you can help protect yourself and your family and be in a better position to deal with the consequences that could occur from illness, accident, unemployment or death. That’s why, when we talk to clients about protection, we talk about value, rather than cost.
How can you protect yourself?
If you have a mortgage or people who rely on your income it’s important to take steps now to understand what would happen if your income suddenly stopped. If you have any existing insurance policies, check the details to make sure they reflect your current circumstances and would still meet your needs if you needed to make a claim.
If you don’t have cover in place we can talk to you about a range of different types of protection insurance that would help to pay the mortgage and provide a financial lifeline for your family if you were temporarily, or permanently, unable to provide for them. This includes cover for serious and critical illness and income protection, which pays out a regular tax-free income if you’re unable to work. We can also advise on a range of life insurance plans, including:
Term insurance – normally taken out to cover mortgage payments, these plans are the simplest form of life insurance and can be tailored to suit your budget.
Family income benefit – pays out a regular income as an ongoing lifeline for dependants.
Whole of life insurance – lasts as long as you do (or until you stop paying the premiums) and provides a lump sum on death.
With some types of life cover it’s also important to consider writing the plan in trust. This is a legal document that allows you to determine what happens to the money after your death and can ring-fence the pay out from inheritance tax.
Whatever your situation, advice is important to make sure you get the most value from your protection insurance. Please get in touch to find out more.
When you’re in the process of buying a house, you might think the best time for your Home Insurance cover to kick in is on the day you move in. Right?
In fact, you must make sure you’re covered on the day you exchange contracts, because it’s at that point that you become legally responsible for the property.
Avoiding a nightmare
Imagine the scene…. you’ve just exchanged contracts on your lovely new home and you’re packing the last of the boxes and finalising the move date with the removal firm. The next morning, you get a call with the news that a tree has crashed through the roof of your new home during an overnight storm and you now have to find the money to fix the damage, as well as temporary alternative accommodation, because you had arranged your buildings insurance to coincide with your move in a few days’ time.
It may seem unlikely, but we would always recommend that you have cover in place on the day you exchange. And when it comes to contents insurance, it’s wise to make sure the cover you take out includes ‘Goods in transit’, in case any of your personal possessions are damaged during the move. Make sure you check with your insurer beforehand as some policies will only cover you for this if you use a professional removals firm.
First time buyer?
If you’re taking out buildings and contents insurance on your first home, take the time to compare the policies
available and don’t just pick the cheapest – it’s often a truism that you get what you pay for.
It’s useful to check the additional benefits that come with the cover as these will vary with every insurer. For instance, one might offer £1,500 worth of cover for flood damage and another might cover double the amount. Sheds, garages and outbuildings, and the contents inside them, may or may not be covered, so make a point of checking these too.
If you’re looking to move to an area that’s prone to flooding, it might be worth taking out cover for alternative accommodation so that you don’t have that additional worry if your house was to become uninhabitable due to a flood.
Buying your first home, or moving to a new one, can be exciting, but stressful. Talk to us about home insurance cover and we can help to take the strain.
When it comes to protection insurance, we hold two firm beliefs:
- it should form the foundation of your financial plan.
- cover should be reviewed regularly to make sure it continues to meet your needs.
The latter is particularly important when you are at a particular ‘life stage’. Whether that’s buying a house, getting married, starting a family, setting up in business, or all of the above, protection insurance will help to protect your loved ones and your financial responsibilities.
So what type of cover is right for you?
- Term Insurance pays out a lump sum if you die within the agreed ‘term’ (the amount of time you have chosen to be covered for, eg. 20 years). Suitable for mortgage protection or while children are financially dependent on you.
- Whole of Life Insurance pays out a lump sum when you die, whenever that is, as long as you are still paying the premiums. Suitable for estate planning or to cover things like funeral expenses.
- Critical Illness Insurance pays out a tax-free lump sum on the diagnosis of certain life-threatening or debilitating conditions, like cancer, heart attack or stroke. You may decide to buy Critical Illness Insurance when taking on a major commitment, like a mortgage or starting a family, but it can be bought at any time to provide peace of mind.
- Income Protection Insurance pays out a regular, tax-free income if you become unable to work because of illness, injury and some policies cover unemployment. It could help you keep up with your mortgage or rent payments, as well as other living costs, until you’re able to return to work.
Things change – and so should your cover
You may already have one or more of these in place, but it’s still worthwhile reviewing your current cover levels – especially if your circumstances have changed. Ask yourself:
Whether your family could cope financially if either you or your spouse/partner died?
How much income would you have if you were taken seriously ill and couldn’t work?
Would your business survive without you or your key people?
How would your lifestyle change if you had an accident and couldn’t do the things you do today?
Contact us today for a Life and Protection Insurance review.