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Expat Investor : May June 2009
STATISTICS & ANALYSES continued from page 19 Sandwich generation spends £1.5bn pa supporting family Over 10m could have wrong protection cover Over 10 million people in the UK could have unsuitable protection cover after failing to update their protection policies, according to research from Barclays Financial Planning. Life-stage events such as changing jobs, buying a house or having a child can render a protection policy, such as life insurance, income protection, or critical illness cover unsuitable. But 42% of people with New figures from Unbiased.co.uk, the find an Independent Financial Adviser search, have revealed Britain's sandwich generation is spending a whopping £1.5 billion per year on supporting their grown up loved ones. Nearly 250,000 people currently form the UK's sandwich generation, which is defined as financially supporting both adult children and elderly relatives. The research shows that 3.3 million Brits are financially supporting adult children (aged 21 and over) spending on average of £254 per month. This means that the UK is spending a staggering total of £840 million per month Adult children (aged 21 and over) Elderly relatives Sandwich generation (adult children and elderly relatives) 24 EXPAT INVESTOR ● supporting their grown up offspring. On the other end of the spectrum, nearly 1 million Brits bear the financial costs of supporting elderly loved ones. This costs Brits an average of £244 per month, totalling nearly £234 million per month. David Elms, Chief Executive of Unbiased.co.uk, comments, “With 12 million Brits taking financial responsibility for at least one other person, the research is a clear indication of the financial weight many families have to carry. “As the credit crunch continues to hit, these costs are only set to increase and for the ‘Sandwich Generation (the 250,000 people Individual cost per month £254 £244 £498 May/June 2009 who are supporting both adult children and elderly relatives) this could result in many facing immense financial pressure. It is important for anyone struggling with the costs of day to day life to seek financial advice. “Meeting with an independent financial adviser can be the first step to taking control of your finances and an independent financial adviser (IFA) can assess your financial situation and help you identify the most efficient way for you arrange your finances. An IFA can also help you plan and recommend investments and pensions so you will be financially secure in the future.” Total cost per month £840m £234m £ 125m Total cost per year £10.2bn £2.8bn £ 1.5bn expatinvestor.com protection policies have had one or more life changing event happen to them since taking out or last updating their cover, meaning they could be under false impression that they have adequate protection for themselves and their families. David Stuart, Director of Advice and Products at Barclays Financial Planning says, “When you buy a protection policy this should not be the end of the matter. “It is crucial that people think about updating any cover, or switching to different types of products if, for instance, they have a child, get married or buy a house. “It’s a worrying statistic that over 10 million people could have the wrong cover when they think they are protected. Perhaps part of the problem is that people aren’t often fully aware of what they need and what sum their protection products cover in the first place, especially when they buy without advice.” Nearly 40% of people that have taken out protection policies did so without receiving advice from a professional, and 13% did not know whether they had taken advice at all. This is concerning when linked to the number of people who have no idea what their life should be insured for (20%) and nearly half of people (48%) do not know why they took out their protection cover, or did so just because they thought they should. Nearly three-quarters of policy holders (73%) do not know how much they are insured for or what they would receive if they needed to make a claim. Mr Stuart continues, “Our research seems to show a big gap in peoples’ understanding of their cover, which could create a false sense of security for thinking they have taken care of protecting their family and finances, when the reality if they made a claim could be quite different.” The lack of people taking advice when buying protection could come down to a matter of trust. Barclays Financial Planning’s research also found that 33% of people prefer to take their financial advice from friends, family or their partner rather than speaking to a professional.
March April 2009