£110k of unsecured debt :(

PWM1

Ok, so over the years my unsecured debt has been accumulating. Lots of moving countries for work. A couple of family emergencies have added to the debt. But now we are finally settled and reasonably stable in terms in income/outgoings.

As pay has increased I haven't prioritised paying off the debts and just thought "Oh, I can afford this/that now", when actually I couldn't. Of course it's regretful but it's happened and this is where I am.

I've come up with an SOA below. A few of the figures are rounded a little, but I've tried to make it reflect the situation. My pay slightly varies over the year, so I've used an average, and have used the figure starting next month after a small pay rise.

I have an annual bonus coming in a few months, which should be between £5k and £10k before tax.

We only REALLY need a car for about 7 months of the year, when my work is busy. I had considered selling the car and paying for a car subscription for these 7 months (the ones with insurance, breakdown cover etc included).

So if we sold the car and used the £10k bonus (hopefully), it would reduce the total to just over £85k. Using the surplus figure on the SOA, I could maybe debt-free in 4 years.

Does anyone have any ideas to help that could help to reduce this time? I know that there are a few items on these outgoings that could be reduced by a few pounds here and there. If there are any pearls of wisdom from forum regulars I would much appreciate.

Thanks to all in advance.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 6100
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 6900

Monthly Expense Details
Mortgage................................ 1470
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 159
Electricity............................. 100
Gas..................................... 100
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 90
TV Licence.............................. 12
Satellite/Cable TV...................... 60
Internet Services....................... 38
Groceries etc. ......................... 350
Clothing................................ 100
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 120
Car maintenance (including MOT)......... 30
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 60
Contents insurance...................... 0
Life assurance ......................... 120
Other insurance......................... 55
Presents (birthday, christmas etc)...... 100
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 3224


Assets
Cash.................................... 1800
House value (Gross)..................... 502000
Shares and bonds........................ 8000
Car(s).................................. 13800
Other assets............................ 0
Total Assets............................ 525600


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 422700...(1470).....2.04
Total secured & HP debts...... 422700....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Credit card...............13500.....215.......29.9
MBNA Credit card ..............21500.....211.......26 (0% until August 2020)
Tesco Credit card..............5200......127.......26
PayPal credit..................4800......140.......19.9
HSBC business loan.............10000.....100.......10
Natwest Overdraft..............3300......25........18
HSBC overdraft.................3000......20........18
Wifes credit card..............3200......20........11
HSBC loan......................21900.....334.......6.7
Ratesetter loan................16016.....458.......3.9
Barclaycard Credit ca..........8800......204.......26
Total unsecured debts..........111216....1854......-


Monthly Budget Summary
Total monthly income.................... 6,900
Expenses (including HP & secured debts). 3,224
Available for debt repayments........... 3,676
Monthly UNsecured debt repayments....... 1,854
Amount left after debt repayments....... 1,822

Personal Balance Sheet Summary
Total assets (things you own)........... 525,600
Total HP & Secured debt................. -422,700
Total Unsecured debt.................... -111,216
Net Assets.............................. -8,316

BabyStepper

Hi there

Well done for posting, it's the first step in sorting it all out.

At a glance, your grocery and mobile phone bills are high. There are some savings to made there.

You don't have any contents insurance listed, is this an oversight? If you don't have any, you really need to buy some.

You have a high income so this should be manageable but I'm concerned about the interest rates on all of your different debts. Is there any way you could get them moved, or as much as possible, to 0% deals? The first 3 and also Barclaycard are shockingly high. Can you still get balance transfers?

Yes use the bonus to go straight to the debt. I don't know about your car situation, I've never heard of someone just leasing for 7 months of the year, maybe work out if it would be cheaper?

What's the £1,800? Are you regularly saving towards an emergency fund? Or is it what you have left this month? You need some savings so you can stop using the cards when something unexpected comes up.

Does your OH know about the debt situation?

Pixie5740

PWM1 wrote: »

Ok, so over the years my unsecured debt has been accumulating. Lots of moving countries for work. A couple of family emergencies have added to the debt. But now we are finally settled and reasonably stable in terms in income/outgoings.

As pay has increased I haven't prioritised paying off the debts and just thought "Oh, I can afford this/that now", when actually I couldn't. Of course it's regretful but it's happened and this is where I am.

I've come up with an SOA below. A few of the figures are rounded a little, but I've tried to make it reflect the situation. My pay slightly varies over the year, so I've used an average, and have used the figure starting next month after a small pay rise.

I have an annual bonus coming in a few months, which should be between £5k and £10k before tax.

We only REALLY need a car for about 7 months of the year, when my work is busy. I had considered selling the car and paying for a car subscription for these 7 months (the ones with insurance, breakdown cover etc included).

So if we sold the car and used the £10k bonus (hopefully), it would reduce the total to just over £85k. Using the surplus figure on the SOA, I could maybe debt-free in 4 years.

Does anyone have any ideas to help that could help to reduce this time? I know that there are a few items on these outgoings that could be reduced by a few pounds here and there. If there are any pearls of wisdom from forum regulars I would much appreciate.

Thanks to all in advance.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 6100
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 6900

Monthly Expense Details
Mortgage................................ 1470
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 159
Electricity............................. 100
Gas..................................... 100
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 90
TV Licence.............................. 12
Satellite/Cable TV...................... 60
Internet Services....................... 38
Groceries etc. ......................... 350
Clothing................................ 100
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 120
Car maintenance (including MOT)......... 30
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 60
Contents insurance...................... 0
Life assurance ......................... 120
Other insurance......................... 55
Presents (birthday, christmas etc)...... 100
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 3224


Assets
Cash.................................... 1800
House value (Gross)..................... 502000
Shares and bonds........................ 8000
Car(s).................................. 13800
Other assets............................ 0
Total Assets............................ 525600


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 422700...(1470).....2.04
Total secured & HP debts...... 422700....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Credit card...............13500.....215.......29.9
MBNA Credit card ..............21500.....211.......26 (0% until August 2020)
Tesco Credit card..............5200......127.......26
PayPal credit..................4800......140.......19.9
HSBC business loan.............10000.....100.......10
Natwest Overdraft..............3300......25........18
HSBC overdraft.................3000......20........18
Wifes credit card..............3200......20........11
HSBC loan......................21900.....334.......6.7
Ratesetter loan................16016.....458.......3.9
Barclaycard Credit ca..........8800......204.......26
Total unsecured debts..........111216....1854......-


Monthly Budget Summary
Total monthly income.................... 6,900
Expenses (including HP & secured debts). 3,224
Available for debt repayments........... 3,676
Monthly UNsecured debt repayments....... 1,854
Amount left after debt repayments....... 1,822

Personal Balance Sheet Summary
Total assets (things you own)........... 525,600
Total HP & Secured debt................. -422,700
Total Unsecured debt.................... -111,216
Net Assets.............................. -8,316

Every debt problem has a solution so there is a way out of this. On the face of it you have £1,822 spare to throw at your debts so you could be debt free in less than 5 years. However, there are some things missing from your SOA such as Entertainment, Emergency Fund (you're a home owner so you need something here) and haircuts (really only £10 a month for 4 of you?). Other items seem high like £100 a month on presents, £60 for satellite television, and £90 a month for mobiles. Does the SOA reflect your finances now or how you would like them to be?

tacpot12

You would have to do the sums to see if a car subscription service would really save you money or not, but if you don't have a car for the other part of the year, will you still use the subscription service at all? If so, your saving isn't going to be that great. You will also lose something when you sell your car - it might be 'worth' £13,800 according to some guide or other, but it is actually only worth what someone will pay you for it. I think I would keep the car, but do try not to use it for unnecessary journeys.

You need to shop around for better home insurance - £720 a year is too much. We pay £250 for a five bed house. Your life insurance costs look very high as well. I pay £23/month for £230K cover (policy was taken out when I was 31). Mobile phone costs look high, but if you are locked into a contract, it would be better to let the contract run to term, and then sign up with GiffGaff for £10/month per person).

Your shares & bonds holding is interesting. I would suggest that you sell the shares as soon as you can do so at a profit, don't renew your bond holding and keep the £8000 in cash. You don't have enough cash savings to cope with an emergency, and having to sell the shares at a lose would hurt you, so convert them to cash and keep your emergency fund in cash. I don't think you have enough emergency funds to use any to pay off your debt. Just focus on the high APR credit card bills, make the minimum payments on them all, and pay the most you can one the one with the highest APR until that is completely cleared, then move onto the next highest rate card.

Finally, is there any chance that your partner can do more work to bring in more income? Doing so might increase the amount available to clear your debt each month and improve her pension provision.

Best of luck with it - you can do this. You are not far from one milestone - when you get your bonuses and use them to clear debts, you will have positive Net Assets!

BabyStepper

Just noticed no emergency fund entry on your SOA. I think you need to add something here for back up.

How long do your loans have left to run? Any chance they are ending soon?

EssexHebridean

Comments in red as usual!

PWM1 wrote: »

Ok, so over they years my unsecured debt has been accumulating. Lots of moving countries for work. A couple of family emergencies have added to the debt. But now we are finally settled and reasonably stable in terms in income/outgoings.

As pay has increased I haven't prioritised paying off the debts and just thought "Oh, I can afford this/that now", when actually I couldn't. Of course it's regretful but it's happened and this is where I am. Better late than never - time to ditch the regrets and focus on fixing it then!

I've come up with an SOA below. A few of the figures are rounded a little as long as they are rounded up by pennies rather than down by pennies... , but I've tried to make it reflect the situation. My pay slightly varies over the year, so I've used an average, and have used the figure starting next month after a small pay rise. Going forward, try to work on your lowest income months - anything above that is then a bonus in itself!

I have an annual bonus coming in a few months, which should be around £5k and £10k before tax.

We only REALLY need a car for about 7 months of the year, when my work is busy. I had considered selling the car and paying for a car subscription for these 7 months (the ones with insurance, breakdown cover etc included). Do the sums on this carefully - check for mileage limits etc as well

So if we sold the car and used the £10k bonus (hopefully), it would reduce the total to just over £85k. Using the surplus figure on the SOA, I could maybe debt-free in 4 years.

Does anyone have any ideas to help that could help to reduce this time? Yes - see your next sentence! I know that there are a few items on these outgoings that could be reduced by a few pounds here and there. that's the one... If there are any pearls of wisdom from forum regulars I would much appreciate.

Thanks to all in advance.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 6100
Partners monthly income after tax....... 800 can this be boosted at all? Even if just a small amount?
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 6900

Monthly Expense Details
Mortgage................................ 1470
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 159
Electricity............................. 100 This and the gas are very high - use comparison sites to check you're on the best deals and use Martin's guide to reducing use as well!
Gas..................................... 100
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 90 This seems high - are you close to the end of contract and can begin to think about switching to SIM only?
TV Licence.............................. 12 Check this - there should be some extra pennies there!
Satellite/Cable TV...................... 60 is this packaged with internet? If so call them and haggle - that's a lot of money!
Internet Services....................... 38
Groceries etc. ......................... 350 You can likely tweak this down a bit
Clothing................................ 100 You don't need to spend this every month - look to switch to essentials only at least for a few months while you make an initial impact.
Petrol/diesel........................... 80
Road tax................................ 10 Are you paying this monthly? You pay a premium to do that, if so. Better to pay annually.
Car Insurance........................... 120 HOW much?!! What are you driving - a ferrari?!
Car maintenance (including MOT)......... 30 There is no way this is covering servicing, MoT test, tyres and other oddments - have another go! ;-)
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0 nothing at all? No after school clubs, sports things, extras needed for school etc?
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 60 Does this include contents as well? Did you check it through a comparison site?
Contents insurance...................... 0
Life assurance ......................... 120 Again - best deal you can get for the cover you actually need?
Other insurance......................... 55 Is this essential? Can it be reduced at all?
Presents (birthday, christmas etc)...... 100 £1200 a year is quite a lot, even with 2 kids involved. Maybe look to reduce by a chunk, at least while you make that initial impact on the debt.
Haircuts................................ 10
Entertainment........................... 0 Not sure I believe this - you never go for a meal, have a takeaway, grab a quick coffee or take the kids out somewhere for a treat?
Holiday................................. 100
Emergency fund.......................... 0 You need something here - those family emergencies should prove the value of this.
Total monthly expenses.................. 3224


Assets
Cash.................................... 1800 Is this the holiday, car maintenance and presents savings?
House value (Gross)..................... 502000
Shares and bonds........................ 8000
Car(s).................................. 13800
Other assets............................ 0
Total Assets............................ 525600


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 422700...(1470).....2.04
Total secured & HP debts...... 422700....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Credit card...............13500.....215.......29.9
MBNA Credit card ..............21500.....211......[STRIKE].26[/STRIKE] 0% (0% until August 2020) this is the only 0% card?
Tesco Credit card..............5200......127.......26
PayPal credit..................4800......140.......19.9
HSBC business loan.............10000.....100.......10
Natwest Overdraft..............3300......25........18
HSBC overdraft.................3000......20........18
Wifes credit card..............3200......20........11
HSBC loan......................21900.....334.......6.7
Ratesetter loan................16016.....458.......3.9
Barclaycard Credit ca..........8800......204.......26
Total unsecured debts..........111216....1854......-


Monthly Budget Summary
Total monthly income.................... 6,900
Expenses (including HP & secured debts). 3,224
Available for debt repayments........... 3,676
Monthly UNsecured debt repayments....... 1,854
Amount left after debt repayments....... 1,822 This is great, and can really make an impact - so where has it been going?

Personal Balance Sheet Summary
Total assets (things you own)........... 525,600
Total HP & Secured debt................. -422,700
Total Unsecured debt.................... -111,216
Net Assets.............................. -8,316

OK - so that surplus would mean a real impact could be made - BUT do you actually have that amount each month?

One quick and cheaty way of making a bigger impact than you otherwise would - go through each of the CC's that are not being used and set the Direct Debit to a figure just above what it needs to be right now - so a £35.76 minimum payment - set the DD to £36 then just leave it to run. Normally the minimum payment declines over time - meaning that you gradually pay less and less - in the meantime you don't take account of less coming out of the bank each month, and that money just gets frittered. By setting the DD you are paying an amount that you have already accounted for, and you stealthily pay off a bit extra as the months roll on. You must ONLY do this on cards you're not using though!

So - the next question - have you and your wife both stopped using credit now? You can see from that SOA that you don't need to - so if you haven't - make that a priority. Also stop using Paypal credit - it's amazing how many people we're seeing on here having issues with this having crept up now!

if you go the route of selling the car, then I'd suggest you start a new savings account for car expenses and then work out what you expect your annual expenditure on a car club to be, plus fuel etc that you will pay on top, and then divide this by 12, setting aside money each month. (Add on 10% to allow for increases in price). Your car is currently costing you a lot BUT that's mainly down to that horrendous insurance. Do you need a car that costs that much to insure or would it be more practical for you to perhaps change for something smaller/cheaper/lower insurance group? If you get rid of the car how will that increase other travel costs that you may currently use the car for? if you do keep the car allowing for your surplus I'd definitely look to pay road tax & insurance as "one offs" rather than monthly - this will make a good savings all on its own. Then budget monthly for the cost for the following year.

You're in a fortunate position with your income but if it fluctuates then clearly this is not a good reflection of the situation every month. make sure that when things are better you REALLY hammer into the debt, allowing you a bit of "treading water" on lower income months. Focus on getting rid of the debts with the highest interest rates first - and if you're likely to be eligible for any more 0% balance transfers try to gradually get those in place too - again concentrating on the highest interest rates to transfer.

WhenIam64

Is that a Repayment mortgage? Interest only would yield a further £700/month or so.

PWM1

Thanks for all the replies.
I'll try to answer most of the queries in one post.

Mobile phone contracts - That £90 includes my wife's contract. She's originally from outside the EU so theres extra add-ons on the contract for her to call home. We will work on trying to reduce it. There are other options for cheap internaional calls, but her country is never on the list of calling cards etc. One of the contracts is coming to an end in June.

We do have contents insurance. I have combined it in the home insurance figure. The buildings and contents cover is £720 per year. It is high because our mortgage surveyor said there were historic signs of subsidence, and the insurers always ask if subsidence has been mentioned in a report, so we have to say yes. (This despite two other surveyors not being able to find any signs of subsidence, and me too!).

If any credit card 0% deals crop up then I will use them. The MBNA balance is on 0% for a while longer, but I'm using about 85% of credit cards, so not much room for rate offers.

Having read your replies I'm having second thoughs about the car - maybe keep it or downsize. The £13800 value is what the local arnold clark will offer me today if I take it there (confirmed already last week).

Haircuts - We do the kids ourselves (for now) and I'm quite a scruffy chap. Once every couple of months maybe. I should probably add a bit for my wife.

Entertainment - Yes this needs to be added.

Life insurance is rather high, but we have a large mortgage and I have minor health issues and family history that always lead to a loaded premium. Will revisit it though. Perhaps overinsured a bit.

'Other insurance' is income protection. We have a lot of commitments and even a moderate medical/injury issue can mean I lose my job. This provides peace of mind and it would be one of the last things to go.

Loans have a while yet to run. The balances in the SOA are the current balances to settle them, give or take a little.

Salary does fluctuate, but not by that much. Between £5800 and £6300.

Wife is self employed, which is increasing in profits. Last 2 years 3k, 8k, with this year projected at £15k. So her income was a bit lower than average on the SOA.

Did a utilities check on uswitch, we are on the cheapest deal for now. Fixed until October. We have quite a large house that it quite difficult to keep warm in Winter.

Clothing was perhaps overestimated.

Road tax is paid annually. Insurance monthly. Car maintenance was low because it was still under warranty (until next month), so I will increase it. I've revised the car insurance after checking it. It is still a bit high as my wife is a new driver, with only an automatic licence (having spoken to the insurers this apparently increases the premium). Also had a claim a couple of years ago.

I understand that we need an emergency fund. What kind of figure would be usual?

Yes it is a repayment mortgage. Never really thought about interest only, but only just switched the deal a couple of months ago, fixed for 2 years.

Revised SOA:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 6100
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 6900

Monthly Expense Details
Mortgage................................ 1470
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 159
Electricity............................. 100
Gas..................................... 100
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 90
TV Licence.............................. 12
Satellite/Cable TV...................... 60
Internet Services....................... 38
Groceries etc. ......................... 350
Clothing................................ 50
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 82
Car maintenance (including MOT)......... 45
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 60
Contents insurance...................... 0
Life assurance ......................... 120
Other insurance......................... 55
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 120
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 3281


Assets
Cash.................................... 1800
House value (Gross)..................... 502000
Shares and bonds........................ 8000
Car(s).................................. 13800
Other assets............................ 0
Total Assets............................ 525600


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 422700...(1470).....2.04
Total secured & HP debts...... 422700....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Credit card...............13500.....215.......29.9
MBNA Credit card ..............21500.....211.......0
Tesco Credit card..............5200......127.......26
PayPal credit..................4800......140.......19.9
HSBC business loan.............10000.....100.......10
Natwest Overdraft..............3300......25........18
HSBC overdraft.................3000......20........18
Wifes credit card..............3200......20........11
HSBC loan......................21900.....334.......6.7
Ratesetter loan................16016.....458.......3.9
Barclaycard Credit ca..........8800......204.......26
Total unsecured debts..........111216....1854......-


Monthly Budget Summary
Total monthly income.................... 6,900
Expenses (including HP & secured debts). 3,281
Available for debt repayments........... 3,619
Monthly UNsecured debt repayments....... 1,854
Amount left after debt repayments....... 1,765

Personal Balance Sheet Summary
Total assets (things you own)........... 525,600
Total HP & Secured debt................. -422,700
Total Unsecured debt.................... -111,216
Net Assets.............................. -8,316

WhenIam64

Yes it is a repayment mortgage. Never really thought about interest only, but only just switched the deal a couple of months ago, fixed for 2 years.

If you go through the SOA and concentrate on the big numbers, that is where you get most effect. You've got financial headroom on the mortgage as you've been repaying the capital. Check your mortgage agreement for payment holidays and/or exit charges. Payment holidays may be better in the short term than switching unless you can get a good deal.

Now the downside. Given you have high debt and equity in the home, your main asset would be a target if you had say an illness or reduction in pay. Check your insurances for that eventuality and perhaps hedge.

Suggest you've got a reasonable way out of this without going all hairshirt but it will take some discipline to do it.

PWM1

I'm with Halifax for the mortgage. Just had a look about interest only and they only consider it below 75% LTV. We are currently just under 85% LTV.
I'll have a look at payment holidays. Always thought they were for people who had been overpaying, but it seems I was completely wrong about that, so thanks for bringing it up. (Edit: Just checked and it's 75% LTV for that also)
As for illness insurance, I'm fortunate that my employer provides a policy that will pay up 5 years if I can't work due to illness or accident. I have topped this up with the separate £55 insurance in the SOA, which will pay out around £3k per month until retirement age.

Pixie5740

If you had to make a claim on your income protection insurance how long would you have to wait until it started paying out? I know that some policies don't pay out for the first month, 3 months, 6 months, depending on how people have set them up and the longer it doesn't pay out the less expensive the policy. If, for example, yours wouldn't pay out for the first 3 months after submitting a claim then as a minimum I would say your emergency fund should be large enough to cover 3 months worth of outgoings.