“I’ll just use my savings.”
The Money Advice Service (MAS) states that people should have three months' of outgoings in savings.
If your client losses their income, how long will their savings last? Even large amounts of savings can diminish quickly. And that would be even more painful if they'd hoped to spend that money on the good things in life - like a new car or holiday.
With the average family spending £585.60 a week* and only saving £200** each month, it would take over 12 years to save enough to cover just one year’s worth of living expenses.
Even large amounts of savings can vanish in a matter of weeks if they lose their income. Use a budget planner to calculate their monthly spend and divide that by their savings. How long would they last?
Source: *ONS, March 2019 **L&G Deadline to Breadline to report, 2020