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Factor critical illness cover into monthly budget

Date: Wed, 07 Dec 2005

Consumers are being advised to factor in the cost of paying for critical illness cover when setting their monthly budget.

The average UK household is spending around £10,656 a year on bills but many people are underestimating the true value of their outgoings, according to research by online bank Egg.

The largest monthly bill is mortgage or rent – an average of £611, followed by council tax bills of around £109 and telephone costs of a further £34.

However, many people are underestimating their household bills by around £300 each month – meaning there is little left over to cover other essentials such as critical illness cover.

"The average consumer believes their home costs 30 per cent a month less to run than it actually does, which often results in failure to budget appropriately and as a result, regularly overspend," said Mark Nancarrow, Egg’s chief financial officer.

He added: "In order to budget effectively it is important that consumers think about their money as being in one of two pots — money which is committed to regular bills, services and costs and money which is leftover for discretionary spending."


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