As yet another report is published, confirming Britons are failing to put a financial safety net in place should accident, sickness or unemployment occur, Simon Burgess from independent Payment Protection Insurer, British Insurance, calls for companies to stop saturating consumers with statistics and reduce their prices instead.
He comments: “It’s widely recognised that when people get information overload they switch off and reject any advice they’re given. People need space to calculate their financial commitments, assess their priorities and come to their own conclusions.
“It’s all very well lenders issuing reports about the saving patterns of consumers and urging them to take out some form of payment protection, but if their premiums are sky high these products will be out of the reach of many people. More reports confirming what we already know and then offering an unaffordable solution is not helping.”
In the last few weeks, a building society revealed the average Briton’s savings would only last 52 days if they were unable to work, 17% think they or their partner may be unable to work for up to 6 months in the future due to illness and 47% of respondents have life cover, as opposed to 10% with a payment protection policy.
A credit information provider says one in five borrowers are worried about repossession and four in 10 would give up their home if they couldn’t keep up mortgage repayments. A recent YouGov survey showed one in five consumers would cancel their Payment Protection Insurance to save money.
Burgess concedes that he’s as guilty as others in identifying issues and offering solutions, but counters his products are affordable.
Government reports warn Britain faces its first recession for 15 years and there are fears that British industry has slumped, resulting in further job losses. Consumers are also being warned further inflation rises are on the cards along with 40% gas and electricity price hikes.
Burgess concludes: ““I suspect everyone’s getting a little weary of these headlines – we know times are tough and we know the credit crunch is tightening its grip. So why aren’t providers reducing their payment protection premiums? They’re quick to identify how few people have this cover, but do not offer policies that are good value, written in plain English and pay out when times get tough.”
The PPI sector was recently berated by the Competition Commission for overcharging consumers some £1.4bn a year and Burgess believes that the actions of banks and building societies have caused people who need mortgage, loan or income payment protection to lose faith in this cover.
