Coronavirus has affected every aspect of our lives, particularly our financial stability. The crisis has acted as a stress test for the nation’s finances, highlighting the fragility of many people’s financial safety nets.
It has compelled individuals to take a closer look at their finances to see how they can reduce their expenses and become more mindful spenders.
Just like the Bank of England conducts stress tests on banks to gauge how they can withstand severe economic scenarios and have enough capital and are able to support the economy, the pandemic has provided a stress test for the personal finances of millions of people around the globe.
Saving for a rainy day
The outbreak has emphasised the importance of having emergency savings to fall back on. If you have some money put by, it is worth shopping around for the best rates, rather than letting your savings stagnate in a poorly paying account. If you don’t have savings, then a regular savings scheme could be an excellent way of building up those rainy day funds.
Protection is paramount
While it is easy to think you will never be ill enough to be unable to work, lockdown has changed that attitude for many. Insurance policies such as life cover, critical illness cover or income protection insurance could really help reduce the financial burden on you and your family.
Difficulties with debt
A sudden reduction in income for much of the population has left many facing higher levels of debt. While mortgage or other debt payment holidays have provided temporary relief, they will not last forever. Doing nothing could put a permanent black mark on your credit score, it’s best to be proactive…
Help is at hand
If the pandemic has shown us anything, it is that we never really know what’s around the corner. We’re here to help you get financially prepared for whatever lies ahead – so please get in touch.
It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.
Tax and Estate planning are not regulated by the Financial Conduct Authority
The value of pensions and investments can fall as well as rise. You may get back less than you invested.
Will writing is not regulated by the Financial Conduct Authority. Quilter Financial Planning Ltd are not responsible for any will writing advice.