Unemployment insurance

[OUB1974]

I'm in 2 minds whether to continue with unemployment insurance.

We have a low income at the moment (only £1K per month), as dh is looking for work. On the other hand, we have no mortgage to pay. We have plenty of savings to cover outgoings for a year or two if I lost my job. We would get no benefits due to savings.

I have paid £15 per month unemployment insurance for the last 5 years. I lost my job last year but never claimed as I found a new one quickly. It was good to know we had that cushion though (we had a mortgage then).

The cost of insurance has more than doubled, more than £35 per month. It's quite a high proportion of my wages. I dont know if we need it now though now we have no mortgage and savings? We also have very small pension pots so I was hoping to start to put money into both pensions and savings for our children from our current savings. As our income has come down such a lot I'm worried we wont be able to save much again if we had to use them to live off.

I can see it looks almost impossible to get unemployment insurance at the moment though due to the pandemic. Maybe I should just stick with it while i can still get it?

I'm new in my job so don't have many rights and it would cover £60% of my salary. It just seems such a lot to pay out.

What other insurance do you have, such as Income Protection?

Unemployment insurance would be hard to get but is that a reason to keep it, given your financial situation? If you were made unemployed, what would it pay out and for how long?

We don't have anything else at the moment. It's difficult to know what to do. It would pay £600ish per month for a year...which wouldnt be enough to live on but would stop us going into savings, which we would struggle to build up again

Everything has changed so much for us lately - our income is a third of what it was, my employer pension used to be brilliant, now it's awful. On the other hand, we no longer have a mortgage. Maybe sickness cover or life insurance would be more sensible...

Only you can decide if it is worth you paying £x per month for £7200 of cover.

You have over £16k in savings (I think, given that you say you would get no benefits) and you don't want to use that if you are made redundant. I can see that but on the other hand could you be putting £x per month to better use for paying for something else. You have the savings to cover being made redundant if it took you a year to get another job, and you may get something a lot quicker than that.

If it was me I would be looking at insuring events which I could not cover myself - so long term disability, ongoing sickness such as what a back injury may involve, death of spouse. Unemployment insurance is a nice to have but is it affordable, only you can decide.