With everyday living costs putting a strain on incomes, many households have found it tricky keeping their finances ticking over in recent years.
But, even if you’re financially on track, a sudden unexpected financial hit, perhaps due to illness, an accident, or a job loss, can quickly upend things.
With temperatures falling, the chances of slips and trips could increase – potentially leaving some people financially vulnerable if they need to be off work.
Rich Horner, head of individual protection at employee benefits provider MetLife UK says that having accident and health protection cover in place could be key.
He says: “In the past, there haven’t been these types of everyday protection products on the market but that is all changing, because the industry is realising there is a need to protect people for the everyday and not just for the most serious occasions or end-of-life.”
While the immediate impact of accidents or illness is widespread, there are groups which could be particularly risk, he says.
This could include people who rely on carers and may otherwise need paid-for care, or those who are self-employed.
He adds: “Single parents are largely also significantly more exposed to the financial impact of everyday accidents and unexpected medical diagnoses.
“Putting plans in place can seem difficult, but for anyone that fits into these groups, looking at your options, from protection cover, to seeking information from websites like workingfamilies.org.uk are good places to start.”
For employees, Horner suggests getting to grips with your workplace policy to understand how you’d be affected.
Horner says: “There are a few simple but critical things to speak to your employer about.
“Ideally, in the event of an issue, you will be able to agree some flexible working hours while you recover and scale back to the necessities, allowing for adequate handovers where needed – but hopefully keep working and earning.
“However, a full understanding of your company’s sickness policy and whether there will be discretionary support will help you prepare for any issues before they happen and consider what protection you might want to put in place.”
People struggling with debt may also want to consider contacting a charity such as StepChange; Citizens Advice; the National Debtline, run by the Money Advice Trust; or Christians Against Poverty.
Some people may be able to access “breathing space” schemes to give themselves time to get on top of their debts, giving temporary legal protection from creditor action while they make a financial plan.
If you’re in debt and getting mental health crisis treatment, you might be able to get #BreathingSpace from your creditors
— CitizensAdvice (@CitizensAdvice) May 16, 2021
Check your options for help to get out of debt ➡️ https://t.co/JjKeaV1kmS
The schemes available depend on where someone lives in the UK.
In the longer-term, building a savings buffer can also help insulate people from financial shocks.
It’s often recommended that people aim to have the equivalent of at least three to six months of outgoings handy in savings.
While this may not be achievable for some households, putting aside a bit of money each week could help to go some way towards building an emergency savings pot.
Being diagnosed with a serious illness such as cancer can also mean people have financial concerns to deal with, on top of the impact on their health.
According to charity Macmillan Cancer Support, four in five (83%) people with cancer in the UK experience a financial impact from their diagnosis, which for those affected reaches more than £1,000 a month on average.
One in four young people with cancer are getting further into debt or have fallen behind paying a major bill because of increased living costs.
— Macmillan Cancer Support (@macmillancancer) October 3, 2022
Almost three quarters of younger people with cancer (74%) are worried about the cost of food over the next 12 months.
Derek Nott, director of services at Macmillan Cancer Support says: “The financial hit that many people face as a result of a cancer diagnosis can come from an array of extra and often unexpected needs, such as traveling to and from appointments and higher costs at home, as well as a drop in earnings if they need to stop working, or work less.
“We’d encourage anyone struggling with the financial impact of cancer to call Macmillan’s free support line on 0808 808 00 00 or visit our website at macmillan.org.uk to understand the support that’s available.”
Heating bills can be a particularly pressing concern at this time of year.
The energy price cap has increased for the final quarter of 2024, following rising prices on the international energy market.
Regulator Ofgem has introduced tougher consumer standards for vulnerable households. It expects firms to treat people struggling with debt fairly, which could mean offering repayment plans at the earliest opportunity and considering offering temporary debt repayment holidays, where appropriate.
Energy suppliers have a priority service register – a list of customers who may need extra help, which could be due to a life event or needing support on a longer-term basis.
Ofgem has more information about the register and getting help with bills at ofgem.gov.uk.
Shopping around to see if a cheaper energy tariff is available may also ease the pressure.
Contacting your bank as soon as possible could also help to head off potential problems with income dips – and account providers may be able to suggest options that the customer did not realise were available.
Eric Leenders, managing director of personal finance at UK Finance, which represents the banking and finance industry, says: “Income reductions, on top of managing bills and other household costs, can lead to money worries.
“If you think your borrowing is becoming unmanageable, contact your lender as soon as you can. There’s no need to wait until you’ve missed a payment as they’re ready to help even if all your payments are up-to-date.
“There’s a range of tailored support delivered by trained and experienced staff, as well as substantial help available from the debt advice sector.
“The earlier you make contact, the more options your lender has to find what works for you, and the sooner they’ll be able to help.”
