29th October 2015
At age 44 the typical Briton will hit their so-called peak of financial responsibility claims income protection specialists LV=.
At this stage in life, the group’s research found that many people are typically juggling nine major financial responsibilities – varying from meeting mortgage payments to covering the costs of raising a family.
LV=’s Cost of a Child report estimated parents devote nearly a third, at 29%, of their gross annual household income to these commitments.
The study also showed when various financial responsibilities ‘peak’ across your life, including saving for a house deposit (age 25), paying for a wedding (30), kids’ schooling costs (39), paying kids’ university fees (47) and saving for retirement (52).
From the research it is clear that the North-South divide is alive and well with those living further up the country seeing their financial responsibilities peaking at a younger age.
Typically, southerners of the country saw their responsibilities peak at the age of 47 whereas, for their counterparts in the north, this happened eight years earlier.
The main reasons for this are the fact that in the South and London people tend to marry and have children later in life and that above the Watford Gap, property is comparatively cheaper meaning that people typically get on the housing ladder earlier.
Conversely even though many often see a significant fall in their income when they leave the workplace, typically, by this point many of the financial responsibilities of adulthood such as mortgage payments and childcare costs have evaporated. In fact, the findings show that for those entering the later years of their life their key responsibility is the costs of paying bills.
Myles Rix, managing director of protection at LV= said: “It is clear that by our 40s, many will be relying on their income to achieve a multitude of things, including raising a family and all that this entails.
“However, whether someone has children or a mortgage or not, we would always encourage someone to put in place a financial back up plan, such as income protection, that ensures that they would be able to meet their financial commitments if they were to suddenly to lose their income due to accident or sickness.”
A life of responsibilities – when various financial responsibilities peak