Blended Families Need New Thinking From Insurers

Interesting research from L&G as the UK sees the transition of the old nuclear family into something more flexible and in some respects, more complex emotionally, plus potentially unpredictable when it comes to long-term financial outcomes;

2.2 million households across the country are now made up of blended families. However, new research from Legal & General has found that blended families face unique challenges, particularly when it comes to their money as they try to balance complex arrangements and incomes that are sometimes stretched across multiple households.

More blended families have protection in place

Levels of protection insurance among parents of blended families are higher than average for the rest of the UK. Those in blended families are a quarter (26%) more likely to have taken out protection insurance when they remarried and reevaluated their finances, and over twice (56%) as likely to have taken out protection insurance when they became a step-parent.

Step-parents have greater concerns about their financial future

However, while blended families might be more likely to have insurance in place, starting over and building a new household does have a significant impact on their financial reserves. Parents of blended families are 35% less likely to have a rainy-day fund in place and are 61% less likely to regularly put money into savings and investments. One in five parents of blended families said the end of their previous relationship had a direct impact on the fact they no longer had savings.

This can lead parents to worry about their security, with half of all blended families concerned for their financial future as a result (45%).

Paula Llewellyn, Chief Marketing Officer & Managing Director (Direct), Legal & General Retail:

“Creating a new family structure is often a wonderful, happy time but can also bring challenges. Families are often trying to find a new way that works for them, and how you manage your money is just one part of that. It’s not always easy, from figuring out how financial support for children is split with parents who might be outside the home, to agreeing how expenses are paid for with your new partner but it’s all part and parcel of the next big adventure.

“Our research shows that while the parents of blended families might face some financial struggles, they are also more likely to have protection in place. Protection insurance, which provides a safety-net when the worst happens, seems to be more front-of-mind for these families perhaps because people are more aware of the impact that a significant change in circumstances can have. For parents looking to get to grips with the changes in their finances, Legal & General has resources available.

“It’s important that our industry understand and embrace the changing needs of families, making sure that appropriate products and services are available. The route to family building isn’t “one size fits all”, and we need to adapt and ensure products are flexible, and customers understand their options. No matter their family set up, people should feel empowered and informed when it comes to managing their money.”