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Protecting yourself

Be prepared and safeguard what matters

We all have plans, but financial wellness means being as prepared as possible for the unexpected. From your boiler breaking down to a job loss, or the death a loved one. 

Whether you are facing a temporary or permanent financial loss, it helps to have some emergency savings and protection in place. The good thing is there are small steps you can take today to help you feel more protected against things we might not be able to control.

How far ahead do you plan for financially?

We asked how far in advance people plan for their financial needs and found that 63%* only plan for a year or less. But planning ahead can be a good way to financially prepare for the future.

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Build your emergency fund

Having a rainy-day fund for unexpected money shocks, like an unexpected event or bill, is a great foundation to safeguard yourself, your lifestyle, and your family.

You can start by aiming to save around one month’s income, but it's ideal to have at least three to six month's income saved. It’s a good idea to build this up over time, and make sure it’s kept in a separate bank account.

Have protection in place

Insurance may protect you, your loved ones and your belongings from the cost of something going wrong.

If something unexpected does happen – such as a burglary, a car accident or an illness – it means you won’t have to bear the full financial cost on your own.

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Learning more about types of insurance

You may be familiar with insurance for your home or car, but there will come a time when you need to protect things even more important – your life and income. Insurance for these things means that you and your family are taken care of if the worst should happen.

Life assurance

Critical illness cover

Income protection

Life cover pays an amount to your family or dependents if you die within the term of the policy. It’s helpful to think about what you want the money to cover when you set the amount – for example, to clear a mortgage or debts, pay funeral costs, or money to support family living costs. This can be bought as a separate policy or alongside life assurance. It pays a set amount if you are diagnosed with one in a list of serious medical conditions, such as cancer, even if you recover. You should consider the key expenses or bills you might want it to cover. Don’t forget to think about the costs for things like help with your recovery or adaptions to your home should you be less mobile. Income protection covers your wages or salary should you become unemployed due to an accident or sickness. It pays out for a fixed period, or until you start working again, retire, or die. You can set the policy to pay a replacement income, or just to help cover essential bills.

 

How to safeguard your savings

It’s really important to think about what you can do to protect the savings that you’re working hard to build up. This includes anything you have that you might want to pass on to your loved ones when the time comes, as well as your retirement savings.

Make a will

People often forget that a will is a form of protection for your loved ones. 

If you die without one, you’ll have no say over what happens to your money and assets. A court will decide how they are distributed, and only married or civil partners and some other close relatives can inherit. It could also make the process more stressful, longer, and more costly for your loved ones. 

So sadly, if you fail to leave instructions, in some cases, relations by marriage, close friends and even unmarried partners could be left with nothing. 

You can access low-cost will-writing services if your affairs are straightforward. For example, you can get a low cost will template or pack from stationery shops and there are also online services. More complex situations might be better handled by a solicitor, where charges will apply.

Protect your retirement savings

Your workplace pension is a valuable investment and there are ways you can protect it. After all, they are your hard-earned savings.

Nominate your beneficiary

  • Protect your pension by making sure your provider knows who you’d like your pension to be paid to should the worst happen.
  • For your Fidelity workplace pension, you can nominate your beneficiary by logging into PlanViewer. You can choose a single person or decided to divide your pension with up to 20 members of your family, friends or charities as beneficiaries.

 

Check if you're on track

Do you know how much you need to have saved to retire? Our savings milestones are rules of thumb to help you plan your journey to retirement.

A quick summary on protection

  • Work towards having three to six months of emergency savings in place
  • Take care of you and your loved ones by having appropriate insurance and creating a will
  • Protect your pension by nominating a beneficiary.

 

*The Fidelity Global Sentiment Survey, 2022. The data collection, research and analysis was completed in partnership with Opinium, a strategic insight agency. Data collection took place between August 2022 and September 2022 and includes a sample of 1000 UK adults. Our research found that 64%* of people define ‘financially well’ as having money set aside for an emergency and 48% say this is the most important aspect of financial wellness they want to address.