A new survey has found that many parents in the UK have no cover should they die or become ill and have done no tax planning.
The ‘Why family matters survey’ from HSBC questioned 1,042 adults in the UK and found significant financial planning gaps:
- 52% of parents with dependent children have no financial plan in place
- 48% of parents said they have no life cover
- 32% of people in their 50’s do not have retirement savings factored into a financial plan
- 81% of people said they wanted to leave their assets to their children but tax and estate planning remain low priorities
- A staggering two thirds of parents have not made a will
Parents lack protection
The survey highlighted a worrying lack of provision amongst parents should they die, become ill or indeed lose their jobs.
Around half of parents have no life cover in place and 19% of people did not realise the effects that the death of one of the parents would have on the family. This means that around a third of people do realise the financial difficulty death may cause but have done nothing about it.
With the cost of life cover so low, the lack of provision amongst many parents could easily be rectified.
Christine Foyster, head of wealth development at HSBC, said: “The fact that such large numbers of households are not planning ahead is leaving families greatly exposed to unforeseen events.”
She continued: “Protecting the household’s financial assets during parents’ working lives will not only ensure that families can cope if there is a change in circumstances, but should also be seen as an important part of preparing for retirement.”
The report also highlighted that two thirds of parents have not made a will.
If no valid will is in place a court decides who is appointed the guardian of dependent children, which may or may not be in line with the wishes of the deceased parent. Experts therefore recommend that all parents should have a valid will to ensure that their wishes are carried out should they die.
There are various ways to make a will, however most legal experts recommend using a Solicitor as they are regulated by the Law Society. Will writers, who may seem cheaper, are not regulated, meaning there is nowhere to turn should things go wrong.
Those people who have not made a will can take advantage of Will Aid in November, which aims to ensure more people have wills and help charities at the same time.