Families faced with rising payment protection insurance premiums
By Lezanne Janse van Rensburg, 15th December
2009
With a weakening economy bringing several people to their knees,
British families are struggling to keep up with sharp increases in
Payment Protection Insurance (PPI) premiums.
Households have seen a jump in their PPI bills over recent
months, largely due to sky-rocketing unemployment rates and surging
crime statistics resulting in more claims against insurance
companies.
Due to insurance companies gaining lower returns on investments,
companies were forced to increase the payment protection insurance
costs in order to cover the vast amount of claims they are faced
with.
An alarming number of people have been laid off since the
beginning of the global recession and have been forced to rely on
insurance companies to cover mortgage payments. This has resulted
in other families' having to cope with 35 percent increases in PPI
rates over the last 10 months.
Families are paying £35 per month more in
payment protection insurance fees compared to £26 last year.
According to recent figures, middle class households have seen
an increase of approximately £110 over a one-year period. This
means that families are paying £35 per month more in payment
protection insurance fees compared to £26 the same time last
year.
Statistics compiled by the price comparison website,
Confused.com, painted a grim picture. According to Confused.com's
findings an average household, with a £600 mortgage and car
insurance, is currently paying almost £160 more for PPI than at the
beginning of this year.
Experts are stating that a further increase of almost 10 percent
in payment protection insurance fees should be expected within the
next year.
The recession has resulted in a rapid rise in fraud and
burglaries which means insurers are faced with more claims.
According to Confused.com's Will Thomas it has made insurance
companies "more cautious". This has resulted in insurers having to
up their PPI premiums in an attempt to cover their own costs.
Adrian Lowcock from Bestinvest said that the increasing PPI
costs are adding even more stress on an already struggling economy,
he said: "With Britain still in recession extra financial burden on
families does not help the economic recovery."
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