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Personal Finance lessons in schools are essential
Issue of the month
Schoolchildren are given almost no advice or guidance on personal finance matters, yet from the age of 16 onwards they are expected to juggle student debt, credit cards, bank accounts, saving and investments, mortgages, as well as all the other pitfalls of personal finances. Then they need to financially protect their debt, as well as any dependents or salary. No wonder the UK financial system is in such a mess.
Children should be taught the basics of personal finance. The national curriculum touches on it in parts but what is needed is comprehensive guidance on the cornerstones of good financial planning. Without educating the consumers (and bankers, politicians and regulators) of tomorrow, we will struggle to make a dent in the £2.3 trillion protection gap, while the financial mismanagement of the past decade will continue to be repeated. As Tom Baigrie said in his LifeSearch blog: “Educate, don’t regulate.”
Round up
6 – number of rate changes since the last bulletin (AEGON, Friends Provident (x2), Legal & General (x2), Zurich)
77 – the % of men who have ignored medical symptoms of ill health in the past year, according to research by Friends Provident, highlighting the importance of ensuring financial protection is in place
126,815 – the number of new individual Income Protection sales in 2008, according to Swiss Re. A rise of over 15,000 on the previous year
3 million - LV= new Critical Illness Protection limit in £
20 million – the number of men in the UK without any form of financial protection against a critical illness, according to research by Friends Provident
£1.1 trillion – the size of the UK business protection gap according to Legal & General
Case study of the month
Client: Mr Gilby
Needs: initially the client called us for Life cover. He is young, single, no kids, no mortgage.
Our recommendation: the adviser explained that Life Cover was not a priority for him and that Income Protection and Critical Illness were far more important bearing in mind he had no dependents and no major debts.
Result: the client bought Critical Illness and Income Protection policies and now has far more comprehensive cover than if he had gone to a salesman or website where he wouldn’t receive any advice and would inevitably have only been sold the inadequate Life Cover that he initially requested.
(If you need a case study, feel free to get in touch and we’ll find one for you).
Heroes of the month
- Peter Le Beau…
…who was made an MBE in the Queen's birthday honours list for service to the insurance industry and to charity. Peter is the Managing Director of independent consultancy Le Beau Visage and has had a massive impact on the world of financial protection over the years.
- LV=…
…for deciding to cut premiums for clients who have cancer as an exclusion on their critical illness policy. The reductions will range from 10% to 30% depending on the sex and smoker status of the insured and also whether it’s a standalone or combined life and critical illness policy. A very TCF move. BUPA and Fortis offer premiums cuts when exclusions are added too and AXA have announced they plan to follow suit shortly. Why aren’t all providers doing this?
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