HSBC Insurance urges financial planning amid recession

”HSBC

HSBC Insurance is warning consumers to review their finances amid the current economic climate.

The fact remains that many have had to tighten their purse strings but HSBC Insurance is urging consumers to review their finances in order to limit the adverse impact of the economic downturn on their finances in the future.

The insurer is concerned that as finances become tight, one in ten people have cut existing insurance policies. This is particularly worrying says the insurer as it is advisable to insure against loss of income/health/job - particularly in a climate of rising unemployment. The insurer also advises to continue saving into a pension.

Ian Martin, Head of Retirement Businesses at HSBC Insurance UK, comments: “Our report shows that there are big gaps in people’s financial preparation for later life and many are simply not acting to plug them.

“It is important that people do the right thing, not simply the optimistic thing, for future pension provision. With confidence returning to the markets, people should exercise caution by diversifying their risk when saving for the long term in order to take advantage of an improving economic position“, adds Mr Martin.

Meanwhile, HSBC economist, Dennis Turner, adds that financial planning is extremely important as he warns that the recession is not over yet.

“Both the Nationwide and Halifax measures of house prices have been creeping up over the summer and while an end of recession in the UK is to be welcomed, it is only the first step in the recovery process,” explains Mr Turner.

“For all the growing optimism there is nervousness that there is still bad news to come. Access to credit, possible public spending cuts and inflation all have the capacity to turn the initial recovery into a false dawn. We are certainly not out of the woods yet,” cautioned Mr Turner.

Michael Dicks, Barclays Wealth head of research, also cautioned: “While the UK economy appears to have emerged from the recession, we are anticipating a rocky road ahead.”

In other news, the British Chambers of Commerce (BCC) has today cast doubt over the UK’s exit from recession in the third quarter.

The leading business group said while business confidence has strengthened, the economy was still “frail”.

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