With a packet of twenty cigarettes now costing £5.40, and the forthcoming restrictions of smoking in public places, there has never been a better time to quit smoking.
Stopping smoking not only improves your health, it can also improve your wealth, as we discuss in this article.
Recent findings by Charcol suggest that quitting smoking could cut eight years from mortgage payments and that is just one of he ways that smokers could save money by abstaining from their habit.
A smoker with a 20 a day habit will spend around £2,000 per year, so if they stop smoking they will be saving £160 per month.
This amount of money could be put away to pay for a family holiday every year, or used to boost your pension fund with the contributions being tax free.
Regular monthly payments in to a pension fund over a 20 year period could create a fund of approximately £100,000 which would provide an annual income of £6,000 upon retirement.
Life assurance savings
Smokers generally pay twice as much for life assurance as non smokers, so there are considerable savings to be made by quitting smoking.
A thirty nine year old male smoker would be charged £36 per month for £150,000 of life cover with Legal and General, whereas a non smoker of the same age would only be charged around £18 per month.
These savings amount to a further £216 per year which can be used to boost savings, reduce debts or leisure activities
To qualify as a non smoker, a former smoker would have to demonstrate that they had not ingested any form of nicotine for at least twelve months, so it takes a while for life assurance benefits to apply.
A smoker hoping to benefit from non smoker life assurance rates without actually quitting, should not lie to insurance company, as these companies often approach your GP or even test your blood for nicotine traces.
Giving false information to the life assurance company is very risky because any claim could be invalidated should they discover the truth.
Cheaper private medical cover
With the popularity of private medical insurance increasing, prices for PMI are becoming more competitive, however lifestyle plays a major factor in monthly premiums.
Smokers are generally charged extra for private medical insurance, so someone who stops smoking can make significant monthly savings with PMI premiums.
Smoking does damage wealth
If the smoking restrictions that come into force on July 1st are not enough to help you stop smoking, then the financial costs of smoking illustrate how this habit is damaging your wealth.
Significant monthly savings can be made by kicking the smoking habit. These savings could be used for leisure or fun activities – which to our mind would provide greater incentive to quit smoking – or for a more sensible savings or investment approach
Annual savings can add up to many thousands of pounds over the years. This is money that is literally going up in smoke.