Meeting the cost of a comfortable lifestyle is a bigger financial concern than dwindling savings for the nation, with 6.7 million people happy to raid their savings and investments to cover day-to-day outgoings.

According to a study published by LV=, that the most important concern to people is keeping up with their chosen lifestyle. This is fine if you have the money, but if you are sacrificing saving and paying debt to have the little luxuries in life you have to reconsider. In a downturn it’s crucial to save, not spend as you were before the credit crunch hit.

The survey also found that the majority are taking precious little action to protect and provide for the things they love most. Whilst maintaining current income is the nation’s fourth highest priority, and one in three fear this could be impacted by the financial crisis, just 4% of adults say they have taken out their own insurance to replace their income if they were to become ill and unable to work.

But thankfully, some people are thinking with their head – a third of adults have savings on deposit to act as a safety net and a quarter have cut their insurance or started using their savings to help make ends meet.

Mike Rogers, group chief executive of LV=, says: “Rather than doing away with valuable insurance or eating into savings, it is important for people to take stock of their financial situation.

“It’s a concern that three times more people have pet insurance than have income protection cover, and only one in ten of us have critical illness insurance. Ideally people should protect all of the important things that they love in their lives, but our study shows their actions don’t match their words. This may be due to lack of awareness or a mistaken belief that protecting income and health is very costly. Whatever the reason, now is the time for people to review what financial protection they have in place to cover their key life priorities, and take action to bridge any gaps.”

SOURCE: LV=, 29/06/09

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