Inflation and family protection: what to check again

What the figures show

Inflation in the euro area moved up in spring 2026. According to Eurostat’s flash estimate, annual inflation reached 3.0% in April 2026, up from 2.6% in March. Energy rose most, at 10.9% year on year.

For Cyprus, Eurostat’s estimate was also 3.0% in April 2026, up from 1.5% in March.

Three per cent sounds small, but inflation compounds. If it stayed at 3% for ten years, something that costs €100 today would cost about €134.

Four questions for your family

For a family, inflation means pressure on the budget and a reason to check again. Four questions are worth answering afresh:

• Is the emergency fund still enough? If your fixed monthly costs have risen, three months of costs today is a bigger sum than three months last year.
• Is the education goal realistic? Fees, student rents and living costs in ten years will not be at today’s prices.
• Is your life cover still adequate? A sum insured set years ago buys less today. If your family needed five years of income, the same amount may now cover less time.
• Is your monthly saving sustainable? If living costs are squeezing you, it is better to adjust the amount on purpose than to stop altogether.

What about your policies

Many life policies set a fixed sum insured. That is simple and clear, but it means the real value of the cover shrinks as prices rise. Some plans offer indexation: a yearly increase in both the sum insured and the premium. Ask whether yours has it and whether it is switched on.

On medical cover, check the limits and the excess. If the cost of care is rising, a limit that looked comfortable years ago may be tight today.

Why it matters to you

Your insurance and financial protection should not stay the same when the cost of living changes. It needs checking and adjusting. A plan that was right five years ago may cover less than you think today, without a single word of the policy having changed.

The response does not have to be drastic. Small, regular adjustments usually work better than one big change once the gap has already grown.

Inflation affects retirement too. A retirement savings goal worked out at past prices may fall short at future prices, and the further away the goal, the more the difference matters. For the basic layers of a family’s resilience in hard times, see Wars, pandemics and your family’s financial resilience.

What you can do now

• Compare your fixed monthly costs with last year and update your emergency fund target.
• Find the sum insured on your life policy and check whether it is index-linked.
• Recalculate your education goal with the Child education goal tool.
• Check whether your savings sit in an account that earns nothing, and whether that suits when you will need them.
• Check your retirement target again with the Retirement savings goal tool.
• Set aside an hour a year for this check, ideally at the same time each year.