Payment Protection Insurance Wanes With Consumer Confidence
Research conducted by the Association of British Insurers (ABI), has found that as the cost of living increases in the UK, nearly 70% of Brits say they are less willing to utilize payment protection insurance (PPI), in order to pay their insurance premiums, mortgages, and/or other outgoings.
As consumer confidence fades, in step with the UK’s economic climate, the grip on household budgets equates to fewer consumers being willing to cover their outgoings with payment protection insurance.
A high majority (90%), of Brits believe that the country’s economy is worse than at this same time last year. Furthermore, more than 80% of those polled expect a further downturn in the economy in the coming year. Even as companies put cost-cutting plans into action, in an effort to relieve economic woes, unemployment is on the rise.
Regardless of the prudence of purchasing PPI, many Brits are still unwilling to purchase protection, such as mortgage insurance, which is designed to provide financial support, in the event they become unemployed and unable to meet their repayment responsibilities.
Nick Kirwan, the ABI’s Assistant Director of Health and Protection Insurance stated, “It is worrying that so many people are not prepared to look at taking out protection insurance, even insurance which covers redundancy given the uncertain economic outlook.”
“It’s clear that we need to work harder to get the message across about the peace of mind and value that having the right protection insurance gives individuals and families. We recently published a consumer fact-sheet on protection insurance products. We hope this will encourage more people to consider protecting their most important financial assets - their income and their home.”
Fifty percent of respondents to the survey said that they have life insurance, while 39% said that they do not have life insurance, PPI, or mortgage payment protection insurance (MPPI).
“Given the economic outlook and the risk of rising unemployment, people need to develop strategies to protect themselves better,” offered Rebecca Driver, the ABI’s Director of Research and Chief Economist, in response to the trend.
According to city analyst Capital Economics, thousands of middle-class workers are now undertaking second jobs as a way of coping with the rising cost of living. Business analysts, lawyers, police officers, and IT workers are all among the masses of people now moonlighting in order to make ends meet.
Some of the freelance work now being sought after by the middle-classes are selling items on eBay, designing Web sites, working as chauffeurs, or even taking on second shift work in their existing fields, wherever possible.
Compared to previous periods of recession, there has been a 5% increase in the number of people taking on a second job, bringing the current total to approximately 1.15 million; as unrelated industry groups are united by financial necessity, regardless of the relief that payment protection insurance could bring.