Where are you? Financial resilience
01 May 2026Financial resilience within a household can already be squeezed, without any additional issues arising. If illness were to occur, then the financial situation can deteriorate quickly. This blog is not designed to potentially scare a reader into taking out some sort of protection, but to consider what the reality might be, where you are in relation to this, and if you are comfortable with the situation as it is.
With inflation and prices rising, especially recently, the cost of living is not getting any easier to cope with. Sensibly, you may well have some accessible savings as an emergency fund if (as examples) the car breaks down, the roof leaks, or you just want to go on holiday. However, if you were unable to work, due to ill health, how long could you keep afloat financially? Days, weeks, months, or more?
Importantly, if you are employed, how long will your employer pay you if you are unable to work, either at a full rate or at a reduced rate? You might want to have a look at your staff handbook to see where you are, and importantly if their cover is enough for your circumstances.
We are all individual, as are our finances, and the usual bills that we pay are unlikely to go away if we become ill. There are various insurance options that can be taken out (subject to application terms), such as income protection (sometimes known as permanent health insurance or PHI for short to replace in part income after a deferred period) or critical illness cover to pay out a lump sum on diagnosis of a serious illness. Both benefits can be used to help meet the cost of a situation changed due to ill health.
For those that are self-employed, both types of cover noted might be options to provide protection as there is no employer to rely on. There are many options available under both types of plan that can offer bespoke cover to meet any budget costs that you might have in putting up an umbrella of cover to help see you through any unforeseen circumstances. Costs are normally based on age, sex, health, and lifestyle, along with the term that you want to cover for. This might be a notional future retirement age, such as 60 or 65, or to the end of any mortgage term or school fees funding costs, as examples.
However you look at your financial resilience, make sure you know where you are. How long could you stay afloat and are you comfortable with this position? If not, it might motivate you to save more as a cash buffer. Alternatively, speaking to a financial adviser about your financial protection needs is usually worthwhile, or it might be a combination of the two options. If you already have protection in place, then check and review that it still meets your needs regularly.
Please do check your position now, and check this with your partner/spouse as well so that they know the situation and you can both be ready.
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
Director
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899
