You CAN pro­tect your fam­ily from the Bud­get cuts

(but it will cost you £6,700 a year)

Daily Mail - - Money Mail - By James Coney

FACED with a £156 bil­lion bud­get deficit and an an­nual in­ter­est bill that threat­ens to hit £70 bil­lion in five years, the Govern­ment is be­ing forced to make dras­tic cuts.

Prime Min­is­ter David Cameron has warned that there are ‘in­evitably painful times’ ahead.

You can pro­tect your fam­ily fi­nances from the cuts, but at a cost. But if you wanted to safe­guard your in­come, mort­gage, pen­sion and chil­dren’s fu­ture, it could cost you £6,712.

IN­SURE YOUR SALARY

A RAFT of staff cuts are planned for the pub­lic sec­tor — mainly in lo­cal govern­ment a nd in ad­min­is­tra­tive roles.

But if the econ­omy starts to slow again, then those in the pri­vate sec­tor are not likely to be safe — es­pe­cially if an ex­pected in­crease i n VAT per­suades shop­pers to spend less on the High Street, and if house prices start to fall.

The only way to safe­guard your in­come is with an in­come pro­tec­tion pol­icy. Be­ware though. If you knew you were go­ing to l ose your job ( or that your com­pany was mak­ing re­dun­dan­cies) be­fore tak­ing out the pol­icy, it would be in­valid.

But that doesn’t mean you can’t take out a pol­icy if you aren’t wor­ried that it might hap­pen.

The i ncome pro­tec­tion will match your salary for a limited pe­riod af­ter you lose your job. Premi­ums de­pend on your age and job. You can only make a claim a cer­tain num­ber of months af­ter tak­ing out the pol­icy — nor­mally three to six.

Ac­cord­ing to bro­kers Life - search, a 45-year-old man tak­ing out a £ 2,500 a month cover would pay £68 a month with Scot­tish Prov­i­dent. For a woman, it would cost £115.71 a month, also with Scot­tish Prov­i­dent be­cause they are more likely to lose their job.

TO­TAL COST: £816-a-year for a man (but £1,388 for woman).

PRO­TECT YOUR MORT­GAGE

IF YOU lose your job, then you could strug­gle to meet your mort­gage pay­ments. A mort­gage pro­tec­tion pol­icy would cover your re­pay­ments should the worst hap­pen.

Premi­ums for a pol­icy cov­er­ing a typ­i­cal £150,000 loan on a rate of 4 pc would cost £38 a month.

TO­TAL COST: £456 a year.

PAY DOWN YOUR DEBTS

IF YOU fear los­ing your job, then tackle any out­stand­ing debts as quickly as pos­si­ble. Go for those charg­ing the most in­ter­est first.

Some­one with a typ­i­cal £5,000 credit card debt would have a min­i­mum re­pay­ment of around £112 a month. It would nor­mally take 28 years to clear.

Re­pay £300 a month and it would be wiped out in one year and seven months, ac­cord­ing to fi­nan­cial data ex­perts Money­facts.

TO­TAL COST: £2,256 a year in ex­tra pay­ments.

TOP UP YOUR PEN­SION

THE state re­tire­ment age is set to rise, sav­ing £108 bil­lion by 2050. And higher-rate tax­pay­ers could see cuts to t he amount of tax re­lief they get. This means we will all have to work longer be­fore be­ing able to claim our state pen­sion.

The age at which both men and women can qual­ify for the state pen­sion is be­ing raised from 60 for women and 65 for men to 68 for both by 2046 at the lat­est.

A 30-year-old woman who still wanted to re­tire at 60 would need to save an ex­tra £88 a month to plug this gap. A 30-year-old man who still wanted to re­tire at 65 would have to save an ex­tra £27 a month.

TO­TAL COST: £1,380 a year for a hus­band and wife.

SAVE FOR TU­ITION FEES

TU­ITION fees and in­ter­est on stu­dent loans are ex­pected to in­crease. Uni­ver­si­ties have al­ready pleaded for higher fees — some of even £20,000, but at least of £5,000 a year.

At present f ees are £ 3,290. Should they hit £5,000, fam­i­lies would be faced with find­ing at least an ex­tra £5,130 for each child’s uni­ver­sity ed­u­ca­tion, on top of the £10,000 they al­ready need to pay. Most par­ents only re­ally start sav­ing for their child’s uni­ver­sity ed­u­ca­tion when they hit sec­ondary school. For two chil­dren of sim­i­lar age, this leaves par­ents need­ing to find £122 a month to cover the ex­tra fees.

TO­TAL COST: £1,465

a year

CON­SIDER HEALTH COVER

STRUG­GLING hos­pi­tals could be closed, and many lo­cal pri­mary care trusts are threat­ened with bud­get cuts. So if you are wor­ried about the care your fam­ily would get if they fall ill, then you need to have a fam­ily health­care plan.

A BUPA health in­surance pol­icy for a fam­ily of four costs £95.60 a month.

TO­TAL COST: £1,147.20.

Stark mes­sage: The Prime Min­is­ter David Cameron has warned of painful times

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