Most families aren’t making dramatic financial mistakes. They’re making quiet ones. The ones that only become visible when something goes wrong. The ones where, looking back, the fix would have taken an afternoon and cost less than a family holiday.
Here are five of the most common — and what to do about them.
Mistake 1: No life cover, or not nearly enough
This is the most common and the most significant. Millions of UK families have no life insurance at all, and millions more have a policy that would cover the mortgage but not much else.
A rough rule of thumb: ten times your annual income, plus your outstanding mortgage. For most families, that’s somewhere between £400,000 and £800,000. Many people have a fraction of that in place — often just a basic policy from when they first got a mortgage, never reviewed.
The fix: get a review. Find out what you actually have, what you actually need, and what the gap looks like. Life insurance is cheaper than most people think, and the cost of not having enough is, in the worst case, catastrophic.
"Quiet mistakes. The ones that only become visible when something goes wrong. Five of the most common."
Mistake 2: Life cover not written in trust
This is the one that catches people who have done the right thing on every other count.
A life insurance policy not written in trust becomes part of your estate when you die. It goes through probate. In the UK, probate currently takes an average of nine to twelve months. During that time, the payout is frozen. Your family can’t access it.
Writing a policy in trust takes around twenty minutes, costs nothing, and means the money goes directly to your family within weeks of a claim being settled — not months.
If you have life insurance and you’re not sure whether it’s in trust, call your insurer today and ask. That one question might be the most valuable thing you do this week.
Mistake 3: No income protection
The risk of dying during your working life is real, but it’s lower than most people think. The risk of being unable to work for an extended period due to illness or injury is significantly higher — around one in four people will experience this at some point in their career.
And yet around 88% of working adults in the UK have no income protection in place.
If you went off sick tomorrow and couldn’t work for a year, what would happen? Would your mortgage get paid? Would your family manage? If the honest answer is “probably not,” income protection is the missing piece.
It pays a regular monthly income — typically 50-70% of your salary — while you can’t work. It’s not expensive. And it’s the policy that keeps everything else going when life doesn’t.
Mistake 4: No will
Around 60% of UK adults don’t have a will. The assumption is usually that it’s something to sort out later, when you’re older, when things are more settled.
The problem is that intestacy rules — what happens when you die without a will — don’t care about your intentions. They apply fixed legal rules about who inherits, regardless of your actual wishes.
Unmarried partners inherit nothing under intestacy. Children from previous relationships may not be provided for as you’d intend. The guardian you’d have chosen for your children isn’t legally appointed.
A will takes an afternoon to sort out. We write them for free as part of our service. There is genuinely no good reason to delay.
Mistake 5: Assuming the state will cover it
There’s a persistent belief in the UK that, when things go really wrong, the state provides. And to an extent, it does — but nowhere near enough to maintain most families’ standard of living.
Statutory Sick Pay is £116.75 a week. Bereavement Support Payment is a lump sum of £3,500 for those with children. These amounts are designed as safety nets, not income replacements.
The gap between state support and a family’s actual financial needs is exactly what personal protection insurance is designed to fill. Assuming the state will cover it is not a plan — it’s a hope. And hope isn’t protection.
The common thread
What all five mistakes have in common is that they’re things most people know they should probably address. They’re on the list. They’re not forgotten — they’re deferred.
Deferral is the real risk. The best time to sort your life insurance, write your will, and put income protection in place was five years ago. The second best time is now. Because the premium you pay tomorrow is higher than the premium you pay today. And the health issue that makes you uninsurable might not have happened yet.
None of this is complicated. It just requires a conversation.
