Income protection insurance

How will you pay the bills if you were sick or injured and couldn’t work?

There is a growing unease about the economic fallout of coronavirus (COVID-19), with many businesses laying off contractors and putting staff on extended leave, as well as natural worries about contacting the disease.

What this crisis has shown is that being unable to work can quickly turn our world upside down. No one likes to think that something bad will happen to them, but if you can’t work due to a serious illness, how would you manage financially? Could you survive on savings or sick pay from work? If not, you may need some other way to keep paying the bills – and income protection insurance is an option to consider.

You might think this may not happen to you, and of course we hope it doesn’t, but it’s important to recognise that no one is immune to the risk of illness and accidents. No one can guarantee that they will not be the victim of an unfortunate accident or be diagnosed with a serious illness. This won’t stop the bills arriving or the mortgage payments from being deducted from your bank account, so forgoing income protection insurance could be tempting fate.

Cover monthly payments

Income protection insurance is a long-term insurance policy that provides a monthly payment if you can’t work because you’re ill or injured, and typically pays out until you can start working again, or until you retire, die or the end of the policy term – whichever is sooner.

Keep your finances healthy as you recover from illness or injury:

▪ Income protection insurance replaces part of your income if you become ill or disabled
▪ It pays out until you can start working again, or until you retire, die or the end of the policy term – whichever is sooner
▪ There’s a waiting period before the payments start, so you generally set payments to start after your sick pay ends, or after any other insurance stops covering you. The longer you wait, the lower the monthly payments
▪ It covers most illnesses that leave you unable to work, either in the short or long term (depending on the type of policy and its definition of incapacity)
▪ You can claim as many times as you need to while the policy is in force

Generous sickness benefits

Some people receive generous sickness benefits through their workplace, and these can extend right up until the date upon which they had intended to retire. However, some employees with long-term health problems could find themselves having to rely on the state, which is likely to prove hard.

Tax-free monthly income

We’re already seeing, as a consequence of COVID-19, how many people are finding it a struggle financially without a regular income. Even if you were ill for only a short period, you could end up using your savings to pay the bills, but how long would they last? In the event that you suffered from a serious illness, medical condition or accident, you could even find that you are never able to return to work. Few of us could cope financially if we were off work for more than six months. Income protection insurance provides a tax-free monthly income for as long as required, up to your nominated retirement age, should you be unable to work due to long-term sickness or injury.

Profiting from misfortune

Income protection insurance aims to put you back to the position you were in before you were unable to work. It does not allow you to make a profit out of your misfortune. So the maximum amount of income you can replace through insurance is broadly the after-tax earnings you have lost, less an adjustment for state benefits you can claim. This is typically translated into a percentage of your salary before tax, but the actual amount will depend on the company that provides your cover.

Self-employment

If you are self-employed, then no work is also likely to mean no income. However, depending on what you do, you may have income coming in from earlier work, even if you are ill for several months. Self-employed people can take out individual policies rather than business ones, but you need to ascertain on what basis the insurer will pay out. A typical basis for payment is your pre-tax share of the gross profit, after deduction of trading expenses, in the 12 months immediately prior to the date of your incapacity. Some policies operate an average over the last three years, as they understand that self-employed people often have a fluctuating income.

Cost of cover

The cost of your cover will depend on your occupation, age, state of health and whether or not you smoke. The ‘occupation class’ is used by insurers to decide whether a policyholder is able to return to work. If a policy will pay out only if a policyholder is unable to work in ‘any occupation’, it might not pay benefits for long – or indeed at all. The most comprehensive definitions are ‘Own Occupation’ or ‘Suited Occupation’. ‘Own Occupation’ means you can make a claim if you are unable to perform your own job. However, being covered under ‘Any Occupation’ means that you have to be unable to perform any job, with equivalent earnings to the job you were doing before not taken into account.

You can also usually choose for your cover to remain the same (level cover) or increase in line with inflation (inflation-linked cover):

Level cover – with this cover, if you made a claim, the monthly income would be fixed at the start of your plan and does not change in the future. You should remember that this means if inflation eventually starts to rise, the buying power of your monthly income payments may be reduced over time

▪ Inflation-linked cover – with this cover, if you made a claim, the monthly income would go up in line with the Retail Prices Index (RPI)

When you take out cover, you usually have the choice of:

▪ Guaranteed premiums – the premiums remain the same all the way throughout the term of your plan. If you have chosen inflation-linked cover, your premiums and cover will automatically go up each year in line with RPI

▪ Reviewable premiums – this means the premiums you pay can increase or decrease in the future. The premiums will not typically increase or decrease for the first five years of your plan, but they may do so at any time after that. If your premiums do go up or down, they will not change again for the next 12 months

Making a claim

How long you have to wait after making a claim will depend on the waiting period. You can typically choose from between 1, 2, 3, 6, 12 or 24 months. The longer the waiting period you choose, the lower the premium for your cover will be, but you’ll have to wait longer after you become unable to work before the payments from the policy are paid to you. Premiums must be paid for the entire term of the plan, including the waiting period.

Innovative new products

Depending on your circumstances, it is possible that the payments from the plan may affect any state benefits due to you. This will depend on your individual situation and what state benefits you are claiming or intending to claim. This market is subject to constant change in terms of the innovative new products that are being launched. If you are unsure whether any state benefits you are receiving will be affected, you should seek professional financial advice.

How can we help?

To find out more, please contact Touchstone Investment Advisers on 0203 026 4074 or email info@touchstone-uk.co.uk – we look forward to hearing from you.

Coronavirus investment scams

If it sounds too good to be true, it probably is

Fraudsters are getting more sophisticated, particularly with investment scams. They can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing. However, if it sounds too good to be true, it probably is.

From simple cons to elaborate schemes, attempts to prise away your hard-earned money are nothing new. Yet there are arguably more windows of opportunity for scammers today than ever, especially with the backdrop of coronavirus (COVID-19) and using this to play on the concerns of investors about their money, market performance and what they should do.

Out of the blue

If you’re contacted out of the blue about an investment opportunity, chances are it’s a high-risk investment or a scam. Scammers usually cold-call, but contact can also come by email, post, word of mouth or at a seminar or exhibition. Scams are often advertised online too.

If you get cold-called, the safest thing to do is to hang up. If you get unexpected offers by email or text, it’s best simply to ignore them. You can register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls you receive.

How to spot the other warning signs

Callers may pretend they aren’t cold-calling you by referring to a brochure or an email they sent you – that’s why it’s important you know howto spot the other warning signs.

Unexpected contact – traditionally, scammers cold-call, but contact can also come from online sources, for example, email or social media, post, word of mouth, or even in person at a seminar or exhibition.

Time pressure – they might offer you a bonus or discount if you invest before a set date or say the opportunity is only available for a short period.

Social proof – they may share fake reviews and claim other clients have invested or want in on the deal.

Unrealistic returns – fraudsters often promise tempting returns that sound too good to be true, such as much better interest rates than elsewhere.

False authority – using convincing literature and websites, claiming to be regulated, speaking with authority on investment products.

Flattery – building a friendship with you to lull you into a false sense of security.

When faced with an investment opportunity, especially one that has come out of the blue or is advertised, always ask yourself: ‘Could this be a scam?’ Always take the time to check who you are dealing with.

How can we help?

To find out more, please contact Touchstone Investment Advisers on 0203 026 4074 or email info@touchstone-uk.co.uk – we look forward to hearing from you.

Working remotely

10 essential tips on how to work from home effectively

Prior to the coronavirus (COVID-19) pandemic outbreak, we might have imagined working from home as the opportunity of sleeping in late, lounging around in our pyjamas, and long leisurely lunches. However, as many of us are now having to work from home, even though this offers a great amount of flexibility, it is still a professional job – and it needs to be treated as such.

As you have likely already discovered, working where you live is not as easy as it sounds, especially if you have other people in the space. So where practical and depending on the individual for many working at home, it is still important to have set hours, a dedicated workspace, avoid home-bound distractions, and actually dressing as if we’re going to work, to help keep our mindset sharp and focused.

Top tips on how to successfully work from home

1. Plan your day

This will help you minimise your distractions and maximise your true productive times. Without supervision, even the most conscientious of us can lose focus. Setting a plan not only provides structure to the day, but it also helps you stay motivated. Start the day as you would if you worked in an office. Get up at the time you would usually wake up. Get dressed, and try to avoid online distractions once you sit down to work. You’ll soon discover the best rhythm for your day. Then set realistic expectations for what you can accomplish on a daily basis. Make a plan and stick to it. Make sure you give yourself permission to have downtime. If you have to work extra hours, give yourself some extra free time later on to compensate.

2. Get organised

Maintaining balance is one of the most difficult aspects of working at home, because the work is always right there staring you in the face. To keep you on track (and not working too much or too little), organisation will be key. Get organised by creating schedules and to-do lists. At the start of each day, spend some time organising your to-do list. Be realistic by setting goals you know you can achieve, and never promise too much. Along with your to-do items, set yourself deadlines to get each one done. For example, if you’ve got a report to write, promise yourself you’ll finish it before lunch, before moving onto the next item.

3.Have a set workspace

If you can, designate a specific place for a home office. Store all work-related files, reference materials, supplies and computer or laptop there. Try not to make it near a bed or a TV. Avoid home distractions, and never underestimate the gravitational pull of the fridge and your comfy bed. Ideally, you should ensure that your office space emulates that of a true work environment.

4. Set office hours

Make sure to create a time slot for each of the day’s activities. This helps with communicating to others when your work-time and down-time is. If you have small children, you may need to schedule your work around their naps and periods of home schooling, so that you can have a good period of time to work uninterrupted.

5. Limit the number of times emails are checked

You might find yourself constantly checking email because you’re worried about being out of the loop. However, while it’s important to stay connected, spending too much time on email might distract you from more important tasks.

6. Turn off all social media accounts

In this social media–driven world, it’s likely that you spend a significant portion of your spare time browsing Twitter, Instagram and Facebook. And because the home is therefore inherently capable of putting you in a social media mindset, it’s important to remove it as a distraction while working. Unless it’s essential for your work, stop checking Facebook, turn off Twitter notifications and avoid the temptation to browse your Instagram feed while working. Again, you can do this by promising yourself some time with them once the work is done.

7. Keeping connected and in touch

If you are now having to work remotely due to the coronavirus pandemic, your employer may already have provided the technology – and the chances are you’re using Zoom, Google Chat, Microsoft Teams and so on. However, if this is not the case and you’re looking for tech to enable you to keep in contact with clients or customers, employees or suppliers, the main tools are Microsoft’s Skype, Google’s Duo and Apple’s FaceTime, the last of which only works on Apple devices. Most phone-based messaging apps, including Signal, WhatsApp and Facebook Messenger, also offer video chat, which can be easier to use.

8. Take micro-breaks

When making your schedule, you might want to consider working in smaller chunks of time, and allowing yourself time to get up from the computer to stretch. This will really help you both physically and mentally. When you take micro-breaks, you’ll likely to be more productive. Get some fresh air if you can. Open your windows to let in as much natural daylight and fresh air as possible.

9. Don’t get distracted

One significant difference between home working and the traditional work environment is the presence of family members. While they may not be there all the time, you’re bound to come into contact with them occasionally while working. Because of this, it’s vital that you set boundaries. Make sure that you are focused on the best and proper use of your time during your work hours. Have the radio or some music on in the background as you might do at work.

10. Maintain a healthy lifestyle

Working at home can lend itself to a sedentary lifestyle, not to mention the close proximity of the kitchen and refrigerator, making weight gain a problem. Make sure to schedule time for exercise, keep healthy nutritional snacks nearby to maintain your concentration levels, and remember to keep yourself hydrated at all times.

How can we help?

To find out more, please contact Touchstone Investment Advisers on 0203 026 4074 or email info@touchstone-uk.co.uk – we look forward to hearing from you.

Let’s get physical

How exercise can help during coronavirus

Across the country, fitness clubs and gyms have closed in an effort to stop the spread of coronavirus (COVID-19). For many people, this is much more than just missing a workout –fitness routines have been proven to reduce stress as well as being a social outlet, leaving many people no longer able to follow their usual exercise routines.

It’s well accepted that being sedentary is bad for our physical and mental health, so staying active during this difficult time is important. Being physically active can help lower blood pressure and cholesterol, while also maintaining muscle mass and bone density.

Keeping active

Physical activity also helps to keep your immune system working effectively as it flushes bacteria from the lungs and airways, increases white blood cell circulation, and raises body temperature – all of which help the body fight infection.

As well as the physical health benefits, keeping active is a great way to ward off some of the psychological issues associated with being cooped up for an extended time. Being active helps lower stress hormones, such as cortisol, and promotes the release of feel-good hormones, such as endorphins.

To stay fit and healthy, the NHS advises adults to do at least 150 minutes of moderate physical activity a week, or around 20 to 30 minutes a day, but this may be difficult to achieve while homebound.

Digital offerings

In response to the COVID-19 crisis, a variety of digital offerings have sprung up to ensure people can continue exercise while social distancing.

Wearable giant Fitbit announced in a blog post that it is supporting people during the pandemic by offering 90-day free trials of its Fitbit Premium and Fitbit Coach services. The premium service includes more than 150 workouts, while Fitbit Coach allows users to stream workout videos on phones or computers.

Meanwhile, online fitness membership GymCube has commented that it was seeing a surge in users.

Social media workouts

Although gyms have been forced to close their doors, many are offering their members online services instead. UK health club chains David Lloyd and PureGym are both providing members workouts via their mobile apps, while Nuffield Health is offering workouts via its YouTube channel and well-being app. Virgin Active also announced plans to provide workouts through its social media channels and website.

Children’s fitness

Children haven’t been left out of the fitness equation either. YouTube fitness trainer Joe Wicks is live streaming daily ‘PE with Joe’ lessons on his channel, The Body Coach, on weekdays. His first classes are getting more than 2.1 million views.

If you’re currently stuck at home, you may be feeling demoralised about what this will mean for your fitness. Whether you were training for a marathon or you enjoy working out at the gym, it can be tough to think of putting your usual routine on hold.

Adapting your workout

Even if you’re not much of a fitness fan, you may baulk at the prospect of staying indoors for a number of weeks while barely raising your step count. Exercise is vital for our mental and physical health, and is arguably more important than ever during periods of self-isolation.

The bad news is that, under new measures announced by the Government, leaving your house is only permitted for essential reasons. The good news is that doesn’t mean stopping activity altogether. You’re still able to go outside once per day for exercise. And it’s possible to use this time to get fitter and stronger than ever, albeit while adapting your workout so that it can be done from home.

“Even small increases in physical activity could have important physical health benefits, as well as enhancing quality of life”

Body-weight training

If you can’t leave the house, one of the most effective workouts is a mix of body-weight exercises and high-intensity interval training (HIIT). Body-weight HIIT workouts are relatively short and don’t take up much space. Best of all, they don’t require any equipment.

Body-weight training uses your body as resistance to give you a challenging workout, which can improve your fitness levels and also build strength. Relying on only your body to work out also improves balance and flexibility, engaging and targeting all of the important muscle groups with just a few exercises.

Interval training can be a great way to maintain fitness, and you don’t need much space. Hill sprints, jump squats, burpees, planks, skipping or fast push-ups will have you sweating in no time. There are plenty of suitable workouts available online.

If you have underlying health problems, or currently have a very sedentary lifestyle and any risk factors for heart disease (such as high blood pressure), HIIT may not be safe for you, and you should consider alternatives that you can try.

Low-impact exercise

If you prefer something lower-impact and don’t want to disturb the neighbours, now’s the time to roll out a mat or towel and try some yoga or Pilates. Just because you’re at home doesn’t mean you can’t access a plethora of yoga classes online, fitness routines and meditations. Walking meditations are ideal and can be done in your house, or outside by following social distancing guidelines. Put your earphones in, concentrate on your chosen guided meditation, and get your steps in whilst you do it.

MoreYoga, London’s largest independent yoga studio chain, has started offering free classes on its YouTube channel.

Staying motivated

Of course, even with the best of intentions, you may find your motivation flagging from time to time. You probably just want things to go back to normal, rather than trying to clear an area of space in your living room.

For this reason, it’s important to set goals, big and small, and to schedule your workouts. Routine is important here. You could plan your workouts for first thing in the morning, so you can get them out the way before the day’s distractions start.

You could also set an alarm for a 20-minute movement session three times a day – this will help break the day up and make limited resources go further. Go up and down the stairs, or use a box or ledge to perform step-ups.

Maintaining fitness

It can take about seven to 14 days for your aerobic fitness to start declining. What you lose initially is mostly the gains that you’ve made in the last several months of training. If you’ve been a lifelong runner, you will retain much of your aerobic fitness for several months.

You could track your progress on a fitness app. Some apps have the added advantage of a virtual community, who can hold you accountable and keep you on track. A fitness app will give you solid evidence to refer back to when you’re doubting your progress, and you won’t succumb to negative thoughts that could prevent you from exercising altogether.

Positive thinking

Finally, if ever there was a time to apply the power of positive thinking, during this COVID-19 crisis is it. It’s important not to be disheartened if you can’t continue with your current fitness regime, or a race or event that you’ve been training for has been cancelled. In this day and age, there are a plethora of options and resources to work out from home, so rather than taking a negative view of the situation when it comes to maintaining your fitness levels, see it as a motivating challenge and a chance to switch things up and progress.

Social distancing

The coronavirus outbreak is having an impact on everyone’s daily lives. It is important for both your physical and mental health to keep fit and healthy. The Government’s message is that you can exercise outside once a day for one hour, whilst following social distancing guidelines, but stay local and use open spaces near to your home where possible – do not travel unnecessarily. You should only go outside alone or with members of your own household and keep at least two metres apart from anyone outside your household at all times.

If you have a garden, make use of the space for exercise and fresh air. You need to also take hygiene precautions when you are outside, and wash your hands as soon as you are back indoors.

If you’re new to exercise, start small – try maybe ten minutes of yoga or walking a day, then gradually build up. Even ten minutes of movement a day can help your body and mind feel better. Encourage your loved ones, who you’re no doubt spending a lot of time with right now, to take a moment to move their bodies too. And if you’re not feeling well, follow the advice of your health professional – including some rest.

How can we help?

To find out more, please contact Touchstone Investment Advisers on 0203 026 4074 or email info@touchstone-uk.co.uk – we look forward to hearing from you.

Applying for a three-month mortgage payment holiday

Easing the stress some borrowers will be facing during the pandemic outbreak

Mortgage borrowers who have been adversely affected financially by coronavirus (COVID-19) may want to consider requesting to take a mortgage payment holiday on their residential or buy-to-let mortgage for up to three months to help their financial situation. The Government’s policy is aimed at easing the stress some borrowers will be facing during the pandemic outbreak. Continue reading “Applying for a three-month mortgage payment holiday”

What are you waiting for?

COVID-19 pandemic has made more people think about just how crucial it is to make a Will

Since the outbreak of coronavirus (COVID-19), the number of people seeking to write new Wills has risen by over 30%, according to The Law Society. Understandably, the current situation is causing angst among people, particularly elderly and vulnerable clients who have been self-isolating. It’s estimated that more than half of British adults have not made a Will. Continue reading “What are you waiting for?”

How secure is the future of your family or business?

Projecting ourselves into the future to see what’s around the next bend is not an easy thing to do

Given the current situation during this difficult and unsettling time with coronavirus (COVID-19), it’s important to think about how secure your family’s or business’ future would be in the event that you were no longer around. Understandably, we would rather not think of the time when we’re no longer around, but this crisis has highlighted the importance of protecting the things that really matter – like our loved ones, home, lifestyle and business – in case the unexpected happens. Continue reading “How secure is the future of your family or business?”

Managing volatility

Diversification is paramount in uncertain times

The outbreak of coronavirus (COVID-19) has understandably been dominating the news headlines. Market fear over the escalating global spread of coronavirus has seen a sell-off across many asset classes. This period of market stress further emphasises the importance of diversification within portfolios. Investors’ objectives can rarely be met by investing in a single asset class. Continue reading “Managing volatility”

Beware of pension fraudsters

Safeguard your hard-earned retirement savings from COVID-19 scammers

Fraudsters are exploiting fears over the COVID-19 pandemic to target pension savers and investors. The Pensions Regulator, the Financial Conduct Authority (FCA) and the Money and Pensions Service have issued a joint statement urging people not to make rash pension decisions in the wake of the global pandemic, as criminals try to exploit public fears over the market turmoil to dupe victims out of their cash. Continue reading “Beware of pension fraudsters”