Johnny Timpson's Blog


Regular insights on all things protection from our Technical
and Industry Affairs Manager, Johnny Timpson

18 Feburary 2019

As family spending rises, so does the need for a protection “Plan B”

With incomes squeezed, savings at historic lows and borrowing levels increasing to levels not seen since 2008, the latest Office for National Statistics (ONS) snapshot of family spending makes for worrying reading.

The “Family Spending in the UK” report states it cost £572.60 per week to run the average family home (a 13 year high in real terms once inflation is taken into account, and a weekly increase of £18.40 on the year before).

We see that a huge 1.3 million* and growing number of people in the UK now find themselves increasingly stretched. They’re shouldering the multiple responsibilities of caring for their children, still financially dependent ‘kidults’, as well as sick, disabled or older relatives. The sheer toll this can have on work and life choices as well as on a key bread winner and care provider’s mental wellbeing, and the stress placed on their financial health and resilience is a significant concern. What is also a very real concern is the fact that this is taking place against a backdrop of unprecedented reforms to our working age welfare safety net; this welfare safety net change now extending to those in later life as evidenced by the Pension Credit changes in January.

Looking at the ONS report in a little more detail it reveals that the patterns of working age family spend has changed sharply. We see households reducing their spend on eating out and buying clothes, switching instead to essentials. Food spending has increased by 8% to typically £60.60 a week with more than 27% of weekly expenditure going on transport, housing, fuel and power. The data highlights that in overall terms, transport - simply getting to work, getting the kids to school etc - is the biggest single weekly household cost. It averages £80.80 or just over 14% of overall family spend.

Scottish Widows research shows that only 37%** of primary breadwinners have any form of financial protection in place. This exposure is hugely worrying when you take into account the focus of a household’s income is increasingly the essentials, not the luxuries.

This ever growing dependency on income and the ability to work leaves families more exposed to health related income shocks. There is real value in making time to talk to your clients about intersecting family, lifestyle and mortgage financial resilience, and the benefits of appropriate protection advice and solutions.

To aid, stimulate and inform discussion, it’s worth also noting that:

  • the cost of raising a child to 18 now comes in at more than £150,000 for couples, or more than £183,000 for lone parents.***
  • research from Skipton Building Society found that about 2.7 million parents currently have grown-up children living at home, with only 40% of those “tenants” contributing financially to the costs of running the household.****
  • the numbers of these ‘kidults’ are increasing too with figures from the ONS suggesting the number of 18 to 30-year-olds living with their parents has increased by 6% in the last 10 years.****

When all these factors are taken into account, the need to discuss the financial resilience not just of an individual, but to safeguard the household as an entity becomes increasingly clear. It’s a case of talking about protecting today to safeguard tomorrow…

* Office For National Statistics, 2019
** Scottish Widows Protection Research 2018
*** Loughborough University’s Centre for Research in Social Policy
**** Cited in www.independent.co.uk January 2019

This site is intended for UK authorised & regulated financial advisers only. It is not intended for onward transmission to retail customers & should not be relied upon by any other person. If you are not an adviser please return to our consumer site.

Every care has been taken to ensure that this information is correct and in accordance with our understanding of the law and HM Revenue & Customs practice, which may change. However, independent confirmation should be obtained before acting or refraining from acting in reliance upon the information given.

Important Information about Scottish Widows | Read about how we use cookies

Information within this site is intended for UK authorised and regulated financial advisers only. It is not intended for onward transmission to retail customers and should not be relied upon by any other person. If you are not an adviser please return to our consumer site.

Scottish Widows is not responsible for the content of third party websites. Separate terms apply to the use of third party websites and Scottish Widows does not warrant the accuracy, reliability, availability or otherwise of these sites.

By using this site you agree to our terms & conditions of use. Please read our copyright, companies, legal and privacy information. We may record and monitor calls to help us improve our service.

Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.

Scottish Widows Unit Trust Managers Limited. Registered in England and Wales No. 1629925. Registered Office in the United Kingdom at Charlton Place, Andover, Hampshire SP10 1RE. Tel: 0345 300 2244. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 122129.

HBOS Investment Fund Managers Limited, registered in England number 941082. Registered office in the United Kingdom at Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 119223.

Halifax Financial Services is a trading name of Scottish Widows Limited. Scottish Widows Limited is registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.

Scottish Widows Bank plc, registered in Scotland no. 154554. Registered office in the United Kingdom at PO Box 12757, 67 Morrison Street, Edinburgh EH3 8YJ. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 201601.