The number of people unemployed in the UK fell by 45,000 between January and March 2012 – according to the Office of National Statistics. Yet much of this is being attributed to a rise in part-time workers and confidence in the jobs market is still low.
If you’re worried about job stability, or are having to deal with a cut in pay or hours, there are sensible steps that you can take to give you peace of mind, including:
Build a Nest Egg
It’s sensible to try to build a financial buffer to give you some breathing room should the worst happen. Try to build a nest egg of at least three months salary, so that you have enough cash to tide you over while trying to find another position and sorting out benefits and assistance.
Even if times are already tight, there are many ways in which you can reduce your household expenses to free up extra cash to save.
Go through your bills and check that you’re on the best deal for your utilities and services, as often changing providers or tariffs can make instant savings.
Once you’ve done this, look at ways in which you can cut down your consumption. Change light bulbs for energy saving bulbs and make sure that lights are turned off when not in use. Also make sure that household electrics are turned off when not in use, rather than left on standby.
If a large appliance, like your boiler or washing machine, is ready to be replaced, make sure that you replace it with an energy efficient model that will save you money in the long run. According to British Gas, you could save up to £300 a year by upgrading to an A-rated energy efficient boiler, and it needn’t cost as much as you think. British Gas offers a £400 scrappage discount on boilers installed by them, which could cut the cost considerably. All British Gas boilers are A rated for energy efficiency, and so are a sensible choice for energy-savvy households.
You could also cut down on grocery bills by trying the supermarket’s own or ‘value’ brands – there’s often no noticeable difference in taste or quality. Or head to one of the value supermarkets such as Aldi or Lidl, which offer a great range of groceries and household products at low prices.
Where possible, leave the car at home and walk or cycle. This is better for your health, the environment and your bank balance.
Any spare cash that these small changes save should be put directly into a savings account so you’re not tempted to spend it. Slowly but surely you can build a nest egg for your peace of mind.
Boiler and Appliance Insurance
Once you’ve built up that valuable nest egg, don’t let an unexpected expense like a boiler breakdown eat into it. You can insure your boiler and other essential appliances for a small monthly charge, so that a break down doesn’t spell financial disaster.
The Bank of England has recently warned of mortgage repayment rises, so now’s the time to fix if you can. While a fixed rate may be slightly higher than a SVR, you’ll be able to sleep at night, safe in the knowledge that interest rate increases won’t affect your repayments.
Payment Protection Insurance
While PPI has had a bad press recently due to mis-selling, it can be worthwhile considering if you have loans that will still need to be paid should you lose your job or suffer a cut in wages.
Another insurance option that is growing in popularity due to the instability of the jobs market is redundancy insurance. You can choose the level of cover that you need, and most plans pay out a fixed monthly sum, up to a maximum of 50 per cent of your current salary, in the case of involuntary redundancy.
As with all insurance policies, do ensure that you check the small print for terms and conditions. Most redundancy insurance policies will only pay out for a limited amount of time, for example.
While taking out insurances can add to your household expenses, many find it worth the cost for the peace of mind that it affords. Use the tips above to cut down on your household bills elsewhere and you could enjoy this peace of mind without feeling the effects on the family purse.