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PPI Expert Comments on Competition Commission Research and the Credit...

PPI expert Simon Burgess comments on Competition Commission research and the credit crunch. Consumers shelling out more in mortgage and loan repayments because of less competitive deals should not reject Payment Protection Insurance (PPI) - it's their 'rescue package' and provides a valuable safety net in times of hardship, says Simon Burgess from independent PPI provider, British Insurance.

As the credit crunch means that consumers are shelling out more in mortgage and loan repayments because of less competitive deals, they should not reject Payment Protection Insurance (http://www.britishinsurance.com) (PPI) - it's their 'rescue package' and provides a valuable safety net in times of hardship, says Burgess.

He comments: "Borrowers must not turn their back on this cover - it ensures continuity of payments should accident, sickness or unemployment occur.People are not tied into High Street lenders' products with their exorbitant costs, they are free to shop around and source alternative PPI providers offering premiums up to 10 x cheaper for loan protection, 4 x for mortgage and 5 x for income."

Competition Commission research 'PPI Search Behaviour' confirms consumers wrongly feel tied to the institutions they're borrowing cash from - 42% of those taking out a mortgage believed they could only purchase PPI from their lender, whilst 73% of those with a personal loan and 72% with a secured loan thought they could only buy from their credit provider.

Burgess continues: "This is not good - consumers will naturally reject cover they cannot afford, but those with less cash to spare need PPI (http://www.britishinsurance.com) more than ever as it will provide an invaluable financial cushion.PPI can be sourced very cheaply - our cover starts at 2.15 per 100 per month for mortgages and 2.65 per 100 per month for other loans."

With one million people already struggling to re-pay problem debts, mainly loans and credit cards, Burgess believes PPI allays the repossession fears of those facing redundancy: "News of job losses and cut backs are commonplace and although lenders claim repossession is the last resort, they're already predicting that the 2008 figure will be substantially higher than the 27,100 properties taken into possession last year."

In a bid to help consumers make a more informed choice and not turn their backs on this cover, the Financial Services Authority will next month launch an online Payment Protection Insurance (http://www.britishinsurance.com) comparison table. Detailing the products, premiums, benefits, cover split and deferred payment periods, consumers will be able to input their details and compare appropriate products from all providers, including major lenders, brokers and independents.

Burgess concludes: "This initiative is most welcome - it's been a long time coming. At last consumers will be able to easily compare costs and source cover that's not out of their financial reach. Although this isn't a 50bn rescue package courtesy of the Bank of England, it will ensure customers spend less on PPI and give them confidence to say 'no' to lenders when pressurised into buying their products."

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