Savers told not to sacrifice nest eggs

Category: Savings
Date: 7/1/2009

Hard pressed consumers have been urged not to sacrifice insurance and savings in order to maintain their current lifestyle.

Meeting the cost of sustaining a comfortable lifestyle was found to be a bigger financial concern than dwindling savings, according to research from LV=.

Indeed, 22% of people surveyed said they had been raiding their savings and investments to cover day-to-day outgoings.

Meanwhile, despite nearly two thirds of respondents revealing that the pressures of the recession had led to them wanting to spend more time with loved ones and consider personal and family health, the majority had taken little or no action to protect or provide for them.

Just 4% of adults said they had taken out their own insurance to replace their income if they were to become ill and unable to work.

Moreover, only a third had savings on deposit to act as a safety net, while a quarter had cut their insurance or started using their savings to help make ends meet.

"Rather than doing away with valuable insurance or eating into savings, it is important for people to take stock of their financial situation," said Mike Rogers, LV= group chief executive. "Everyone can take some financial steps, however small, towards protecting the things they love most in life.

"For example, insuring the breadwinners in the family for loss of income will make only a modest impact on most people's finances, yet can provide vital assistance if the worst should happen."