Why women need to protect their finances

by | Wednesday 17th Mar 2021 | Mortgage Insights

If the pandemic and its three lockdowns have taught us anything at all, it’s that no one ever quite knows what lies around the corner.

All being well, the UK will start a cautious reversal of the current social distancing measures in the next few weeks.

The Government says it’s working towards a summer when all legal social distancing measures will be lifted and normal life can resume – though this won’t be before June 21.

But the reality is that although normal life may look and feel a lot like pre-pandemic life, it will be discernibly different, not least in how the country recovers from the economic impact of effectively shutting down the hospitality and non-essential retail sectors for a good proportion of the past year.

We already know the economy has slumped, and the decision by the Chancellor to extend furlough to the end of September is designed to give businesses the chance to ride out the difficult first few months of rebuilding once late May rolls around and shops, cafes and restaurants are expected to be open again.

But the extension of furlough and the cautious lockdown exit strategy simply underline the uncertainty that lies ahead.

Women are especially vulnerable. Statistically, the majority of frontline hospitality roles – those that tend to be public facing – are occupied by women. In the retail sector, it’s a similar picture with women employed in 58% of all retail roles.

And of course, it is precisely these sectors that have not only been most adversely impacted by the government’s measures to combat the spread of Covid-19 but are also most likely to be affected when furlough ends in October and some businesses find themselves having to make hard decisions about the future.

On average, hospitality, arts and recreation businesses have furloughed around 50% of their staff since the pandemic started and there are warnings that unemployment will surge in October when furlough ends.

In addition to making up the majority of the workforce in the hardest hit sectors, women also make up the majority of the army of the nation’s carers – whether for young children, the sick or the frail.

All of which points to potential hardship in event of a hard recession, and although the majority of insurance policies that safeguard personal finance are taken out by men, there is now a clear need for more women to put plans in place to protect themselves.

Income protection insurance to guard against being unable to work due to illness or injury or, with some policies, because of loss of employment is an obvious area to consider.

Income protection cover pays out a tax-free income should you find yourself unable to work either permanently or temporarily for any valid reason specified in the policy.

The regular payments would typically represent between 60% and 75% of your gross salary, depending on the terms of the specific policy, meaning that because they are tax free their real terms value would be closer to your actual net pay.

If you return to work, these payments will end, but in most cases cover (and premiums) will usually continue.

The cost of covering your salary should you find yourself out of work will vary depending on the amount of income you wish to protect – inevitably, the cost of replacing a salary of £75,000 is going to be significantly more than a policy that covers an income of £25,000.

Income protection insurance is different to critical illness insurance (Cancer Cover) and premiums are generally significantly cheaper.

If you’d like to start exploring your options for income protection or putting a financial plan in place to help support you in the event of a serious or terminal illness, why not get in touch with a member of our friendly team.

Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority

Your property may be repossessed if you do not keep up repayments on your mortgage.

Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.

We're Here to Help

If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

As featured in

Understanding a Volatile Mortgage Market eBook

Download Our eBook

Join our mailing list and receive a link to our latest ebook, Understanding a Volatile Mortgage Market. 23 pages of practical insights to navigate the unpredictable mortgage landscape.

You Will Receive A Link To Your eBook Shortly!