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The financial benefits of drinking less coffee

For less than the price of your daily cappuccino, you can protect what’s probably your biggest investment in life.

Despite rising prices and largely stagnant incomes over the last decade, home ownership remains the cornerstone on which millions of people’s lives are built. Often making extraordinary financial efforts simply to get on the property ladder, it now takes over eight years for the average UK first-time buyer to save a 20% deposit towards their own home1.

For many, the precarious long-term financial balancing act in search of the property-owning dream doesn’t end there. Almost half of workers don’t have anyone in their household they could depend on to support them financially2. As if that wasn’t enough, there’s also a 57% chance that the average 30-year-old will need to take at least a month off work before the age of 65 because of illness or injury3.

Therefore, having gone to such extreme efforts, it’s surprising how few first-time buyers take out any form of mortgage protection. Why work so hard for so long to own your own home, only to have it taken away in a relative flash, just because of a single stroke of bad luck?

It could be that people lose sight of the need for mortgage cover in the highly stressful buying process. Or, it could be that it’s not considered necessary. But then no-one bats an eyelid at insuring contents, mobile phones or even pets. Perhaps the perceived cost or complexity puts off some homebuyers. Yet, even comprehensive mortgage protection can cost less than a daily caffeine hit. And with help from a financial adviser, the process needn’t be complicated.

Home comfort

Let’s say David (35) and Katie (32) have a £250,000 five-year, fixed-rate mortgage costing around £800 a month4. Insurer Vitality says it could provide life cover to pay off the mortgage, serious illness cover worth £25,000, and income protection of £800 per month for £52.53 a month. That’s around £1.75 a day – a relatively small price to pay for something that could help them avoid financial difficulty.

Insurance is something most of us need but hope to never use. However, the peace of mind that comes from knowing that a lump sum or regular income would be paid in the event of redundancy, illness, or worse, can be invaluable.

If you have dependants, such as a partner, children or anyone else who relies on your income, make sure you discuss your protection needs with one of our Mortgage and Protection Advisers. They can consider every aspect of your situation and find you the right policy. To find out more call 01823 273880 or visit www.cooperassociatesltd.com/book-an-appointment to arrange an appointment.

1 Nationwide, January 2018

2 Thriving, striving, or just about surviving? RSA, January 2018

3 Based on a male 30-year-old, non-smoker: https://vitalityriskcalculator.co.uk/

4 Nationwide, 5 year fixed mortgage, 80% LTV, £250,000 @ 2.54%

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