However it now appears that the ‘not so ready to lend’ lenders, principally the banks and building societies who caused the mess in the first place, are now restricting the capital flow further with the provision of ‘new’ products designed to protect their capital and circumvent the recent legislation outlawing the selling of PPI (Payment protection insurance) at point of sale of the loan or mortgage.

Fortunately both the FSA and consumer watchdog , the OFT (Office of Fair Trading) have been keeping a close eye on these activities and have today issued a joint statement warning the providers of these products to obey the rules or face the consequences. Both UK Government organisations are determined that another PPI mis-selling scandal should be avoided as new mortgage protection products emerge.

The two quangos have joined forces on proposed guidelines to lenders in relation to new PPI type products, the responsibility for which can fall within either regulator’s area of operations.

The statement emphasises that now is a key time to reinforce the regulations as the insurance market shifts away from PPI and providers begin to develop new products or product features.

Under particular scrutiny are short-term income protection marketed as debt freeze or debt waiver when included with a credit or loan agreement or mortgage.

Some of the payment protection products that the FSA and OFT considered during the preparation of this proposed guidance are:

Insurance. This includes short term income protection or ‘STIP’, an insurance contract which provides a pre-agreed amount to the policy holder if they experience involuntary redundancy or are incapacitated through sickness or as a result of an accident and may be combined with other forms of insurance cover or include other benefits, and which:

o has a maximum time-limited benefit duration;
o is written for a term which is less than 5 years and not predetermined by the term of any credit agreement or RMC; and
o can be terminated by the Insurer.

Non Insurance the creditor agrees to freeze or waive the requirement on a consumer to make periodic repayments, or to freeze or waive interest or other charges, when a specified ‘event’ occurs, such as sickness or unemployment.

Insurance products are regulated by the FSA under the Financial Services and Markets Act 2000 (FSMA). Non-insurance protection linked to a regulated first charge mortgage contract are also regulated by the FSA. Non-insurance protection linked to a credit or hire agreement (including a second charge mortgage) will typically be regulated by the OFT under the Consumer Credit Act 1974 (CCA).

The two organisations will continue to monitor developments in the market, and will take appropriate action under their respective powers where products or practices risk causing detriment to consumers.

The FSA’s guidance stresses that firms should ensure that product features reflect the needs of the consumers they are targeting.

Margaret Cole, FSA managing director, said: “This is the first time that the FSA has issued guidance on the design of a specific product. Firms must learn the lessons of the past and make sure they have consumers’ needs at the heart of new product development.

“That is why we are acting early to ensure firms understand the risks they should bear in mind when designing these products, and how they can manage these risks when developing or distributing the product.

“The FSA cited new forms of payment protection products as an emerging risk in its Retail Conduct Risk Outlook earlier this year, and we are following up on that warning.”

The OFT’s guidance sets out how the OFT considers the Consumer Credit Act applies to payment protection products such as debt freeze or debt waivers linked to a regulated credit agreement, and what firms can do to ensure compliance.

In particular, firms should ensure that consumers are absolutely clear about the nature, price and implications of payment protection products.

For example, if an agreement is offered with an option to choose debt waiver terms, on payment of a fee, it may be necessary to provide financial information including and excluding the cost of the debt waiver.

The guidance also sets out examples of business practices in relation to payment protection products which the OFT is likely to regard as unfair or improper (whether unlawful or not) and so may cast doubt on fitness to hold a consumer credit licence.

David Fisher, the OFT’s Director of Consumer Credit, said: “It is important that the problems encountered with mis-selling of PPI do not arise in relation to new payment protection products.

“Firms need to ensure that they comply with relevant legislation and do not engage in unfair or improper business practices. In particular, they should make clear to consumers what they are signing up to and how much it costs, so that they can make properly informed decisions.”

The consultation will be open for ten weeks, closing on January 13.

With unemployment threatening to reach record levels as the public sector shrinks, it is essential that consumers can purchase protection against accident sickness and unemployment when they commit to a mortgage or large loan. Mortgages must be made easier to obtain and mortgage protection products available to alleviate some of the risks involved in lending for both parties.
There are many established independent specialist companies out there who offer insurance at much cheaper rates than the loan or mortgage providers. Maybe one solution to this ongong saga would be to outlaw totally the provision of cover for debt by the debt provider and its subsidiaries however they want to dress it up in fancy wordings.

Related posts:

1. Insurance Brokers Pay for UK Banks PPI Claims
2. FSA orders GBP 60 Million Mortgage Protection Insurance Repayments
3. Financial Ombudsman Service Overwhelmed With PPI Complaints

Todays official figures show levels of unemployment last enjoyed under Margaret Thatcher’s Tory Government of the Eighties.

Youth unemployment is at its highest level for 19 years.
Womens unemployment is at its highest level for over 23 years.
The public sector is traditionally a large employer of both these groups.
The Governments argument that the private sector creating new jobs will prop up the public sector has proven to be widely inaccurate.
David Miliband pointed out that for every two jobs lost in the public sector only one was being created in the private sector.

The result is that the economy is in a downward spiral and the public sector job cuts are fuelling the maelstrom.
Maybe our public schools are failing as well, because it is obvious that neither David Cameron or the Chancellor bloke, whose name Insurance Blog can’t remember, have even the basic skills in macro economics!

When there was a global depression in the USA in the late 1920′s, FD Rooseveldt’s ‘New Deal’ of public works and public sector employment, brought America out of the downward spiral and introduced infrastructure which gave the post war US a massive competitive advantage.
President Obama has finally realised that cuts don’t work and has announced a massive Federal investment in public works. Alex Salmond, Leader of the Scottish Parliament today said that unemployment was down in Scotland during the last three months due to a large public building program.

David Cameron is carrying on making people and public sector workers unemployed.

If you work in the Public Sector there is still time to get unemployment insurance and income protection however you must hurry.

Income Protection Insurance is available to eveyone in full time employment. As long as you have not been informed by your employer that your job is at risk, you can still take out an income protection policy.

Act quickly and you can protect your mortgage, rent and other regular payments such as council tax, utilities bills, finance agreements and even gym memberships and satellite/cable tv bills. With low monthly payments you have a choice of cover between accident, sickness and unemployment, accident and sickness or unemployment only, with 12 or 18 month benefit options.

Related posts:

1. Public Sector Employees Facing Redundancy Should Consider Unemployment Insurance
2. UK Unemployment hits record heights
3. Unemployment to hit North of UK First warns Specialist Insurer

If you haven’t taken out unemployment insurance yet, there may still be a little time, although given latest figures you will have to move as fast as the postman with the redundancy notices, as UK Unemployment hit record heights.

Here’s the facts of the state of Britains Economy

The employment rate for those aged from 16 to 64 for the three months to November 2010 was 70.4 per cent, down 0.3 on the quarter.

The number of people in employment aged 16 and over fell by 69,000 on the quarter to reach 29.09 million.

The last time there were larger quarterly falls in the employment level and rate was in the three months to August 2009.

The number of people working full-time fell by 37,000 on the quarter to reach 21.16 million and the number of people working part-time fell by 32,000 to reach 7.93 million.

Part Time Working at all time high!

The number of employees and self-employed people who were working part-time because they could not find a full-time job increased by 26,000 on the quarter to reach 1.16 million, the highest figure since comparable records began in 1992.

The unemployment rate for the three months to November 2010 was 7.9 per cent, up 0.2 on the quarter.

The total number of unemployed people increased by 49,000 over the quarter to reach 2.50 million.

Male unemployment increased by 43,000 on the quarter to reach 1.48 million and female unemployment increased by 6,000 on the quarter to reach 1.02 million.

Youth Unemployment at record levels!

The unemployment rate for those aged from 16 to 24 increased by 1.0 on the quarter to reach 20.3 per cent, the highest figure since comparable records began in 1992.

The number of unemployed 16 to 24 year olds increased by 32,000 on the quarter to reach 951,000, the highest figure since comparable records began in 1992.

Redundancies on steady increase.
There were 157,000 redundancies in the three months to November 2010, up 14,000 on the quarter.

The number of people claiming Jobseeker’s Allowance (the claimant count) fell by 4,100 between November and December 2010 to reach 1.46 million, although the number of people claiming for up to six months increased by 7,200 to reach 960,300.

The total number of male claimants fell by 6,600 on the month to reach 1.02 million but the number of female claimants increased by 2,500 to reach 439,300.

The inactivity rate for those aged from 16 to 64 for the three months to November 2010 was 23.4 per cent, up 0.2 on the quarter.

The number of economically inactive people aged from 16 to 64 increased by 89,000 over the quarter to reach 9.37 million.

Early Retirement at Record levels !

The number of people who were economically inactive because they had taken retirement before reaching the age of sixty-five increased by 39,000 on the quarter to reach 1.56 million, the highest figure since comparable records began in 1993.

Wages Stay the Same!
The earnings annual growth rate for total pay (including bonuses) was 2.1 per cent for the three months to November 2010, unchanged from the three months to October.

The earnings annual growth rate for regular pay (excluding bonuses) was 2.3 per cent for the three months to November 2010, unchanged from the three months to October.

The Oulook.

Very Bleak!  The current situation is comparable to the early Thatcher years and the axe has yet to fall on 600,000 public sector workers. The knock on effects to the high street of this contraction in money flow will damage small to medium sized businesses as demand inevitably drops. Further unemployment within the already contracted private sector is inevitable as orders dry up and the unemployemt queues will increase.

All sectors of the economy will suffer from this so called ‘double dip recession’ particularly high end products and high street businesses will suffer. Insurance will not have an easy time either! Already we are seeing once profitable sectors like shop insurance virtually disappear as a viable large market as the number of shops rapidly decreases. When was the last time you saw a high street travel agents or hardware store? The pattern is being repeated across all sectors of the UK Commercial Insurance market.

Coupled with this we are under immense inflationary pressures from energy prices and global food markets which inevitable, although foolishly, will lead to the Bank of England be foreced to politically raise Interest rates. After all, there are no more weapons in the economic arsenal.

Darwinian ConDemNation.

The future is blue and orange and civil commotion – If you are not a merchant banker, are you fit enough to survive?

Related posts:

1. New Year Recession Fears
2. Unemployment to hit North of UK First warns Specialist Insurer
3. Bank of England is Steady at the Helm with Sensible Interest Rate

UK Government Cutbacks Will Widen the North-South Divide

News of job losses continues unabated. Not so much for those employed by the house builders or major financial institutions, but further down the economic food chain. Those companies such as fashion house Ethel Austin with 300 stores predominantly in the North of England. They called in the receiver in February 2010 and have since set about closing 120 stores and issuing 1800 redundancy notices. They, like many others shedding labour, held on waiting for an upturn in the economy that never came soon enough to save them. Faced with still hesitant consumer spending, their loses continued and creditors ran out of patience. However, for the North, it is about to get a lot worse.

The UK’s fairy tale economy saw a mushrooming of Public Sector jobs over the last 10 years. The broad industrial group ‘public administration, education and health’ covered 7.16 million jobs in 2007, 26.9 percent of total employment (Source: ABI statistics). Since then the Public Sector has grown whereas the Private Sector has been battered by the recession. In 2007 there were substantially less than one million unemployed, in February 2010 this figure had grown to 2.5 million (Source: office of National Statistics) and almost all of these job losses were in the Private Sector. Post election slashing of Government budgets is unavoidable and contraction of Public Sector jobs is now widely forecast. The only question is where the axe will fall.

The North South divide is about to get a lot wider as the cut backs in pubic expenditure will be felt most acutely in the North. Because of their national pay scales, the wages of Public Sector employees have always gone much further in the North. They offer the opportunity to spend significantly more in the local economy than their colleagues in the South, saddled for years with high mortgage costs and rents. This has benefited the money in circulation in the North and the boom in restaurants, bars and countless other businesses blossomed up and down the land. Just how much this was dependent upon salaries paid out of the public purse is about to become far more apparent.

Things have now changed and ‘its grim’ is about to return ‘up North’ because cut backs will be felt disproportionately by the major northern conurbations. Perversely, past efforts of Governments to create jobs in northern Britain are about to make matters worse. The Lyons Review from 2004 had a target to move over 24,000 jobs out of London by this year. However Lyons followed years of relocation of Government functions to the regions that started in the 1970′s. As a consequence, by 2009 in the North West 3.4% of total employment was in the Civil Service. This compares to a more typical 1.3% in Eastern England and just 2.1% in London despite being the heart of Government. (Source: ONS, Civil Service Statistics, 2009).

Politicians pledging to preserve front line services in Health and Education will only mean even more pressure is applied elsewhere. Once again it is the North, specifically core cities that are likely to bear the brunt. Local Government statistics show they employ just over 40 people per 1000 residents in cities across the UK as a whole. However, in Manchester this is nearer 45 and in Birmingham, Nottingham, Leeds and Newcastle there are over 55 per capita. Clearly these cities offer greater scope for large scale cut backs than elsewhere in the country.

Whether the Public Sector ‘efficiency savings’ manifest themselves in redundancies or just a recruitment freeze, the North’s disproportionate dependency on the public purse will weigh heavily for several years to come. Money will melt from local economies and it follows that particularly smaller or regional businesses will suffer as a consequence.

State benefits paid when out of work are pitifully inadequate to meet the outgoings of the average household. Therefore, should anyone not have savings to get them and their families through six months to a year of unemployment, they should consider Income Protection Insurance. This can be bought for much less than insuring a car. On-line there are Income Protection Insurance providers offering typical policy benefits of up to £1500 per month. This will pay to up to a year and is enough to meet mortgage and other big bills. Dennis Haggerty of income protection specialist iprotect insurance commented “The most popular benefit level chosen by our customers is £1,000 per month, the average monthly premium for this insurance is under £30.”

Income Protection Insurance is only available to people who are in work and have no immediate prospect of being selected for redundancy. So the time is running out for Civil Servants and other people in the Public Sector to secure this cover before the budget cuts for their particular area are announced.

Insurance companies are there to spread the risk of lost earnings. However they will not sell this type of cover to someone who is very likely to be made redundant, just like they decline fire insurance for a house that is already smouldering. With Public Sector jobs looking vulnerable, there has never been a more urgent time for anyone ultimately paid by the taxpayer to consider how they would meet their financial commitments if they were out of work. With a large section of the local workforce suddenly cutting back their spending because they are worried about their jobs, people employed in the Private Sector ‘up North’ should also be thinking how this could affect them and taking steps to protect themselves and their families.

Related posts:

1. Public Sector Employees Facing Redundancy Should Consider Unemployment Insurance
2. Unemployment Insurance – An Election Safety Net?
3. A History of UK Unemployment Insurance

Whatever the outcome of the General Election on May 6th, there is risk in all the policies pursued and in the unlikely event of the Conservative Party winning an overall majority, six billion pounds of spending cuts would put thousands of public sector, particularly those in the health service, jobs at risk.

We are currently in the trough of the deepest recession since the Conservatives led us into the Thatcher generated trough of the early Eighites, and the Boom Bust Major recession of the early Nineties.

Recessions are basically measured by the level of output of a nation, it’s Gross Domestic Product or GDP. Output is of course affected by demand which in turn is controlled by Government and monetary policy. When output falls we are in a recession.

The difference with the current recession is that it is not a result of a mismanaged economy or poor government strategy as with previous Conservative led recessions, moreover it is the result of a collapse of a mismanaged global banking system.

The above graph demonstrates that although we are in the deepest output recession since the 1930′s, unemployment has remained relatively low up until now. This is because the current recession is a credit led recesssion where demand has been as artificially curtailed by the banking system as it was as artificially created for the housing market. Overall the state of the economy was fairly healthy!

The graph also shows that the effects of quantitive easing are working in keeping employment stable and the difference between the current stable levels of unemployment and those suffered under Thatcher in the 1980′s is the difference in levels that we should expect if the Conservatives are returned to power in May.
And who is going to pay for all this unecessary unemployment?
There is no North Sea oil revenue to squander on dole queues like under Thatcher, and no new information revolution coming to help as happened to Major!

Furthermore, the largest national debt in history created by the policies of quantitive easing, is not a sinkhole to be used as a political football.
Where has all the money gone?
Quite simply into the coffers of Northern Rock, Lloyds TSB Bank of Scotland and RBS to keep them afloat.

I for one am sick to death of hearing about job cuts and job taxes when it’s quite clear that it should be the Banks paying back the money they’ve borrowed and not profiteering off of the futures of Government bonds used to bail THEM out!

A hung parliament, the most likely outcome, will surely exacerbate the underlying trends in unemployment and it would be very prudent if you work for the Government, Civil Service, Armed Forces or Health Sector to get some private unemployment insurance in place now before the cuts start happening. Unemployment Insurance is simple to purchase online, just enter your age and the amount of cover you want to get a quote; and it will provide you with peace of mind and protect your family, income and lifestyle for a few pounds per month, no matter which colour is flying over Whitehall in May!

Related posts:

1. Public Sector Employees Facing Redundancy Should Consider Unemployment Insurance
2. UK Unemployment Figures Highest Since 1997
3. A History of UK Unemployment Insurance

For the Public sector this must be a worrying time. Whoever gets into power come the elections in May, will make public sector job cuts their first priority in order to reduce the massive National debt accrued by so called quantitiive easing.
Civil Servants need to ACT NOW! if they are to protect themselves from redundancy come the Summer of 2010.

Dennis Haggerty Fellow of the Chartered Insurance Institute (FCII) from lifestyle protection company iprotectinsurance explains………

Up until now, Public Sector jobs have largely escaped the ravages of the recession. Although for Defence related jobs, budget cuts have already begun to bite. Because of this, many Mortgage Protection and Income Protection Insurance providers are currently turning down applications from people who work in the Defence industry, believing they now represent an exceptional level of risk. What is meant by risk? The Underwriters think in terms of the number of redundancies made by a specific employer proving much higher than average. The same view is taken about people working for several Councils currently implementing staff reductions.

“Therefore, it is probably the last chance for the majority working in the Public Sector to buy this type of insurance, before the deep post election budget cuts begin.”

State benefits are pitiful compared to the real cost of living for the average family or young couple living in the UK today. When denied their ability to earn a living wage by accident, sickness or unemployment, everyone needs money to fall back on. The fortunate have savings, however the majority will find themselves in real financial trouble within weeks. Research published in 2008 established that most people of working age have less than 2 months wages saved, with 25% reported to have nothing at all. This applies equally to Public Sector employees. Therefore, having an insurance policy that covers all important bills whilst out of work, makes a great deal of sense. For those that need this insurance, get it now before the Underwriters say ‘no thanks’ to all Civil Servants, Local Authority and Health Service employees.

For anyone employed full time (at least 16 hours per week) in the Public Sector and where there are not any reports of any impending threats to jobs, it would be prudent to consider getting a quote right now. If a Government Department or Council for example, has made an announcement regarding cut backs, a recruitment freeze or layoffs, it is probably too late to buy this cover. Without any doubt, now is the time to get a low premium deal, rather than wait for this cover to rocket in price, or applications to be simply denied altogether.

Even those who already have this type of insurance, perhaps just covering a mortgage or a single loan, should check if they have sufficient benefits. For working couples, particularly where the main wage earner is employed, say, by a Local Authority, it could be prudent for them to take out additional low cost cover whilst it is still on offer.

Mortgage Payment Protection Insurance (MPPI) is designed to cover monthly mortgage payments and can usually be increased by up to 25% to contribute toward other expenses related to the home.

Income Protection Insurance (often called Lifestyle Protection) is very similar to MPPI, however it is designed to replace the majority of net income if the person insured is unable to work. As it pays out for up to a year it is more accurate to describe this as short term income protection insurance. It is not limited to mortgage repayments. However many providers cap their maximum monthly benefits at £1500, some £2000. It is rarely more because the Underwriters make the assumption this would be enough for most buyers to pay their monthly bills.

Most buyers tend to be only be interested in unemployment cover in the mistaken belief health related benefit is less important for them. However there are relatively few providers of unemployment only cover and frequently their competitors will offer full Accident Sickness and Unemployment cover for less! More importantly with 2.4m people in the UK claiming Disability Benefit (Dept of Work and Pensions 2008) the risk of health related claims is greater than many think.

The best rates are available on line where Income Protection and Lifestyle Protection Insurance can be bought without the expense of telephone sales or high commission to inflate the price. Moneysupermarket are a good source of comparison quotes, however the summary of cover should always be read very carefully to ensure what each provider offers for the price, really is like for like.

A web based comparison service is provided by the FSA. This is entirely independent and not trying to sell anything. Their tables also include quality measures, although as a result they are quite complex and therefore not easy to use. However they represent a good place to research a shortlist of suppliers to compare quality as well as price.

Applying for Income Protection, Mortgage Protection or Payment Protection Insurance on-line is a great way to save money. However the acceptance criteria applied by different underwriters varies. If applying on-line does not work out, it may simply mean the applicant is one of many who need advice regarding what to buy.

Related posts:

1. UK Finance Giants withdraw Unemployment Mortgage Protection Insurance for own employees
2. UK Unemployment Figures Highest Since 1997
3. Fantastic Value unemployment PPI products released to cope with Credit Crunch

As a concept the first type of Unemployment Insurance available in the UK was created by the Liberal Goverment of Lloyd George with the passing of the National Insurance Act in 1911.
The bill was introduced mainly to protect the two point five million workers in manual trades who along with their employers were required to pay into a central fund to cover the claims.
The payments were calculated on a sliding scale up to a maximum of seven shillings a week.
The cover period for which claims could be drawn was limited to one fifth of the period of contributions.
In other words you had to be in work and paying contributions or premiums for five years before you would be covered for unemployment that lasted a year.
The unemployed who did not qualify for cover or who had not been in work long enough had recourse to the Poor Law authorities which inevitably at this time still meant the workhouse for many unfortunates.

High premiums and poor cover, not a very good effort for the first Government led insurance scheme, but it did offer some protection to those in work, and coupled with the social change of the Edwardian period led to a new sense of Government social responsibility and a working class mentality that became the foundations of the Labour Party and eventually led to other social provisions such as the NHS.

This National Unemployment Insurance scheme proved to be inadequate to provide for the large numbers of unemployed and returning demobilised military, that followed the end of the First World War in 1918.

A temporary scheme of unemployment relief was designed to combat the suffering, which was known as the ‘Out of Work Donation’.
This enabled a much larger payment of 29 shillings a week for men and 24 shillings for women to be made to claimants, with additional allowances for dependents, to most adults who registered as unemployed.
This was available for a strictly limited period, but the Government was forced to grant extensions as more and more servicemen were demobilised.
In 1920 the Unemployment Insurance Act was passed amid an mini economic recovery. The Act extended the provision of the 1911 Act to most workers earning less than £250 per year.
The period in which money could be claimed was shortened to one sixth of the period of payment contributions and for the first time a maximum cover period, during which benefits would be paid was set to 15 weeks.

The UK Economy changed radically for the worse early in 1921 and by the middle of the year unemployment exacerbated by the coal strike, was close to 20 per cent. Under these conditions, the contributory system and the one in six rule were untenable given the threat of political instability and civil unrest among the unemployed.

The Unemployment Insurance Act of March 1921 relaxed the ‘one in six’ rule by providing for the payment of ‘uncovenanted’ benefit without previous contributions. The intention was that benefits would be paid for a maximum of 32 weeks.
The 1921 Act also introduced for the first time what were effectively ‘policy conditions’ a ‘seeking work’ test for those claiming benefit.
Claimants had attend a labour exchange and show that they were genuinely seeking work and were obliged to accept any work paying a ‘fair’ wage – whatever that means!.

In February 1922 further conditions were introduced by way of a means test, aimed at restricting benefit payments. Some groups, such as single adults living with relatives, could be excluded unless it would cause serious hardship.

So what has gone wrong with the system of Nationalised Unemployment Insurance?

Jump forward sixty years to 1979 when Margaret Thatcher duped the nation into electing her with her infamous Labour isn’t working campaign…

…only to return Britain to the largest number of Unemployed since the 1920′s.

Under the Conservative Government of the 1980′s the number of claimants for unemployment insurance far outweighed the resources being paid into the risk pool.
Civil unrest spread to every corner of the country in 1981 as the great unemployed sought vengeance on the Tory elite.
Unemployment Insurance now had to cover many millions who had never contributed to the system, not just those who had worked all their lives and paid their premiums. Fortunately for Mrs Thatcher she was able to pay for her mismanagement by squandering the proceeds of North Sea oil and keeping most of the nation at subsistence level.

So little had changed in sixty years. Out of this mess in the late 1980′s was born a new private market for mortgage protection insurance for unemployment, aimed at the new home owing working classes and middle classes; and initiated by the banks and building societies, primarily to ensure that their mortgages got paid should the home owner lose their job.
Most of these policies were flawed in their design and have been subject to recent criticism leading to the mis-selling findings by the Competition Commission and large fines by the FSA.

To counter this the insurance industry came up with an income protection policy designed to protect the insured against unemployment for a fixed period and a fixed amount commensurate with the level of premium.
National Unemployment Insurance still exists in the form of job seekers allowance or income support whatever they wish to call it, today pays out very little, is still means tested although everyone has to still pay ‘national insurance’ contributions and has an excess period of 13 weeks before you can claim.

One thing that hasn’t changed in nearly 100 years is that, if you are unfortunate enough to become unemployed – you can’t rely on the Government to cover you!
In the current recession it is wise to protect yourself against unemployment with income protection or lifestyle insurance.
Very reasonably rated polices are available from independent suppliers such as Personal Accident.

Related posts:

1. Lifestyle Insurance: How to avoid the unemployment spectre
2. UK Unemployment Figures Highest Since 1997
3. UK Finance Giants withdraw Unemployment Mortgage Protection Insurance for own employees

PPI Should Have Been Included in Government’s Debt Management White Paper Says Burgess

Last week’s Government announcement that consumers are to get their own ‘champion’ in the form of a consumer advocate and benefit from a raft of measures to help them better manage their debts is to be applauded says Payment Protection Insurance lobbyist Sara-Ann Burgess from specialist firm Burgesses, but time will tell whether the theory works well in practice.

Braintree, Essex (PRWEB) July 6, 2009 — Last week’s Government announcement that consumers are to get their own ‘champion’ in the form of a consumer advocate and benefit from a raft of measures to help them better manage their debts is to be applauded says Payment Protection Insurance lobbyist Sara-Ann Burgess from specialist firm Burgesses (http://www.burgesses.com), but time will tell whether the theory works well in practice.

In its White Paper ‘A better deal for consumers – delivering real help now and change for the future’ – the Government is proposing to appoint an advocate who will raise awareness of national issues and represent groups of consumers in court to help them seek compensation and refunds.

It’s banning credit card cheques – blank cheques that are sent to card holders who are encouraged to use them as an alternative spending tool. These involve handling fees and contrary to credit cards, there are no interest free periods and no protection if something goes wrong.

Other debt-management measures include; preventing card providers increasing limits without their customers’ consent, launching a new online credit card comparison tool, courtesy of the Financial Services Authority, assessing whether monthly card minimum repayments are too low (and so allow debts and accrued interest costs to spiral) and reviewing high cost credit providers (50% + APR) who offer credit over the doorstep or via payday loans.

There are also plans to assist people who are at risk from rogue traders – they will be supported by a team formed to tackle internet-based scams and a review of protection for consumers who pay for goods but are not delivered due to the company going into liquidation.

“All of these recommendations sound great,” says Sara-Ann, “but unless the advocate has real power, he or she will not deter credit card providers from encouraging customers to plunge deeper into debt and it will probably take years to implement as there will be a consultation period.”

The Government predicts its advocate will be in post early next year, but concedes the appointee will have no legal power as consultation and a new law would be needed to allow this to happen.

Sara-Ann comments: “I’m interested to see how fast the Government will tackle rogue trader issues as it’s done little to address widespread mis-selling in the PPI sector for years. As a result of its sluggish response, consumers have sunk further into debt via prolific sales of single premium PPI, where the cost of the premium is included in the final loan amount and interest added onto both, complaints to the Financial Ombudsman Service have escalated, group actions are now being undertaken and providers have a free rein to increase their prices and restrict their cover.

“I wonder how long the White Paper review period will last for? The PPI sector has been under scrutiny for around four years now and the deadline for the Competition Commission’s remedial measures isn’t until April and October next year – some five years after the Citizens Advice Bureau first identified that features of the PPI market were seriously harming the interests of consumers.”

She continues: “Given the continued failings that have been allowed to occur within the PPI sector, I’m sceptical about how effective these measures and the role of the advocate will be. I hope I’m proved wrong and sweeping changes are made to stop consumers being encouraged to spend beyond their means, but I would equally like to see greater PPI mis-selling clampdowns and more advice on how to shop around for cover.”

Sara-Ann believes PPI is an effective debt prevention tool as it will repay monthly credit card bills for up to a year in the event the holder loses an income due to accident, sickness or unemployment and would have liked to see reference made to this product in the White Paper.

She concludes: “It only takes a couple of months of missed credit card payments to build up debts which is why this cover is so useful. Credit card providers should be pressurised into offering this cover free of charge to their customers or allow them to purchase at reduced rates.

“It’s a shame the Government didn’t consider Payment Protection Insurance in its measures to tackle indebtedness – instead it’s left to online independent providers such as Burgesses and British Insurance () to ensure quality cover is affordable and accessible to all. Premiums are calculated per £100 of monthly benefit and firms such as these two charge £1.90 per £100 for accident and sickness cover, £3.40 per £100 for unemployment and £3.90 per £100 for all three – well below other providers’ premiums.”

Anyone looking for Credit Card Payment Protection should opt for a policy that pays off all or part of the credit card debt, dependant on the amount of benefit purchased. Older-style policies tend to only pay a proportion of the total credit card bill, usually the outstanding minimum payment. “

……..and while we are on the subject of Credit Cards. Lord Mandelson – please bring the extortionate rates charged by the UK banks into line with the other forms of credit in the UK. The credit card debt is stopping the so called green shoots of recovery!

Related posts:

1. Understanding UK Payment Protection Insurance
2. Mis-Sold Payment Protection Insurance? Claim It Back Now!
3. Payment Protection Insurance Claims and Premiums Rocket

The research carried out by a national survey of over 2,000 adults conducted by YouGov, on behalf of the ABI, also shows that other insurances that are seen as ‘luxuries’ such as life insurance are also being ditched, as families try to balance outgoings with income, in what is already in most homes a seemingly impossible task.

The survey found the following worrying trends for the UK Insurance market:

Nearly a quarter of people 22% say that to save money in the last year they have cancelled or not renewed their home contents insurance.

More worringly, 17% say that they have cancelled or not renewed their buildings cover, some probably against the terms of the mortgage that usually insists that buildings cover is in place to protect value of the charge on the property.

In Scotland, the figures rise to 28% for contents and 21% for buildings.

13% have cancelled their life insurance.

One in five (21%) say that they are seriously considering reducing or stopping saving. (Well with Interest rates so low – who can blame them!)

This lack of cover is leaving many families even more exposed to their biggest fear in the recession: nearly half (49%) of those surveyed said that they currently worry about their in ability to cope with a sudden event, such as a burglary, accident or loss of employment.

Interstingly, other research found that :

Over half (53%) of women worry about how they would cope with an unexpected event (compared to 43% of men).

And 44% of women are worried about the adequacy of their pension (38% men), reflecting lower pensions among women.

Asked what cutbacks people have or would be making: over two thirds (68%) said that family treats, such as eating out, were top of their list, followed by holidays (56%). Six out of ten women are prepared to reduce spending on clothes and shoes.

Insurance Blogger urges those thinking about cutting back on home insurance cover to consider what would happen if their house was burgled or flooded?
With rising crime and rising floods a couple of hundred pounds on a home insurance policy might seem small beer if the worst occurs.
Shop around for home insurance on the Internet or visit a specialist home insurance provider for an array of good deals at the current time.
Similarly if it’s not too late think about purchasing some lifestyle protection insurance if you are worried about your future

Related posts:

1. Home Insurance wars continue
2. Big Freeze – Check your Buildings and Home Insurance
3. Home Insurance – More Th>n up the anti online

There were 12,800 repossessions through the courts by first-charge on the property mortgage lenders and banks, in the first quarter of this year, according to the Council of Mortgage Lenders (CML).

This compares with 10,400 in the fourth quarter of last year, and 8,500 in the first quarter of 2008. Insuranceblogger is disgusted that the people who created the credit crunch crisis for those poor repossessed are so quick to resort to the courts!

Although repossessions are still rising, the CML now thinks its earlier 75,000 repossessions forecast looks pessimistic for the year as a whole, and expects to revise the figure downwards in its next housing market forecast update later this summer.

The number of mortgages in arrears continued to rise both months in arrears and as a percentage of the total outstanding mortgage value.

The number of existing mortgages has declined from around 11.7 million to around 11.1 million.

According to a suit from the CML -
“The key message continues to be: talk to your lender as soon as you identify difficulties emerging, and take advice from an independent money adviser if you have other debt issues as well as your mortgage. Lenders do not want to repossess if a realistic alternative solution can be found.”

Hmm – have a look at this, especially if you are being threatened by debt collectors

Courts, bailiffs, debt collectors and repossesions can be avoided with mortgage protection insurance which will keep a roof over your head even if you lose your job!. Act now before its too late!

Related posts:

1. Avoid Home Repossessions with Mortgage Protection Insurance
2. Buy to let mortgage repossessions increase
3. Tenants at risk as Landlords are repossessed

Insurance Blogger thinks this is outrageous after years of expenditure on the investigations by the FSA and Competition Commission and others, and the subsequent fines for misselling, that any institution, let alone a largely Government owned institution Lloyds Bank, should have the right to challenge any such decision!

Payment protection insurance lobbyist Sara-Ann Burgess from specialist payment protection insurance company, Burgesses confirms our viewpoint. She said “These institutions are without morals and intent on putting profit ahead of consumers’ interests.”
“This latest move is a bid by the banks to continue making billions of pounds in profits in order to prop up other failing business areas.
“We all know PPI mis-selling is rife amongst High Street lenders and their resultant profits are obscene. These delaying tactics, lodged to stop the ban going ahead in October 2010, only serve to prove just how shameless these firms are and the extent they will go to protect their ‘cash cows’.”

The UK Protection Insurance sector takes over £5 billion in premiums every year and around 90% of the premiums goes in profit to Banks and Building Societies.

In 2006, the Competition Commission reported the 12 largest distributors made profits of GBP1.4bn – before the recession kicked in and demand for unemployment insurance protection and income protection insurance policies grew.

After a lengthy investigation into anti-competitive practices, the Commission announced in January a series of measures to lower prices and widen choice in the PPI sector.

These included:
axing single premium PPI and replacing with monthly payments.
a seven day ban on selling cover alongside credit.
a requirement to offer PPI separately to credit.

The Financial Ombudsman Service predicted some 30,000 payment protection insurance mis-selling complaints would be received by the end of March this year and confirmed the majority of them can be traced back to High Street lenders.

It upholds at least 90% of cases and in the case of one lender, 100%.

Sara-Ann Burgess concludes: “How can you on the one hand say banks are working to restore confidence and then on the other have two major players challenging decisions in order to maintain gigantic market shares and prevent freedom of choice? Actions are certainly speaking louder than words. These lenders are damaging the financial well-being of consumers and will continue to do so. What’s equally insulting is the fact that Lloyds is paid for by taxpayers and our money is being used to ensure we continue to be ripped off.”

Insurance Blogger couldn’t agree more! The banks created the current recession by the misselling of mortgages and piggybacked missold mortgage payment protection insurance, and now they are trying to retain their ill gotten share of a market that wouldn’t exist if they had done their job properly in the first place.

BancAssurance is a French joke – Keep your noses out of Insurance – Bankers!

For those of you still in a job, we wholeheartedly recommend Burgesses Unemployment Insurance

Related posts:

1. PPI – ignore after sales follow ups
2. Banks Overcharge for Payment Protection Insurance
3. Credit Cards – time to bring the Banks to order!

Spokesman for the company Dennis Haggerty said

“At iprotect we have always refused to sell Unemployment insurance without it being combined with Accident and Sickness cover as well. This is because our statistics show some of the most expensive and long running claims are for sickness. It is really the only way to be fair to customers to ensure they are covered in of work for any form of involuntary unemployment, not just redundancy.

Despite the recession and the huge increase in unemployment, still some 40% of the claims we receive are for Accident and Sickness related absence from work. Some of our past claimants have been so unwell they could not work for close to a year. The Swine Flue outbreak is a reminder to us all why it is important to have Accident Sickness and Unemployment cover, Further, if people become infected and potentially seriously debilitated by damage to their lungs and internal organs, quite possibly they could be many months off of work.

Modern medical science may avoid deaths in the UK, but if the strain mutates and prevents its victims returning to work, it is some comfort to know that at least the bills will be paid and benefits paid under their iprotect policy prevent their family finances spiraling out of control.”

InsuranceBlogger has had a good look at the iProtect website. It’s very easy to use particularly if you are looking to switch or combine covers or policies. The ratres are some of the most competitive on the market and their lifestyle insurance offers exceptional cover at very cheap rates.

Related posts:

1. Doomsday UK – Swine fever pandemic ravages British Economy
2. Income Protection Insurance – Claim Exclusion & Excess Periods – confused?
3. Lifestyle Insurance Cover – the new ASU and Income Protection

Debit Crunch – Credit Card and Loan Debts May Lead to Mortgage Foreclosures
By Paul Magus

Once upon a time an unsecured loan was exactly that – these days it appears every loan is secured against your property, if not what when you take it out but at anytime in the future, should the creditor wish to pursue an action against you through the UK Courts.

Creditors are using tougher tactics to make debtors pay back their debts – with a recent surge in applications for charging orders. A charging order is a application made to a district judge in a county court. Initially an interim charging order will be granted as soon as the creditor applies to the court for a charge. This will make your property very difficult to sell, even if you were planning to, as a potential buyer will need to negotiate the charge being removed, and would certainly not assist in a quick sale.

You will then be dragged before a district judge a few weeks later to explain why a charge should not be put on your property against for example, your credit card debts. A full charging order will be given in 99.9% of cases and the charge will be registered against your property on the land registry documents.These court orders, enable lenders to secure bad debt on credit cards and on loans against borrowers’ properties. This would result in a loss of equity were the borrower to sell.

Much more worrying for the Nation as a whole is that today some lenders are now unwilling to wait, and according to a recent UK BBC Panorama program are bypassing the initial stages of the debt recovery process and now applying for an immediate ‘order for sale’ from the courts, forcing the property-owner to sell up straight away and pay off their debt from the capital raised against the sale of their house.

The CPS (Crown Prosecution Service) who set the CPR rules for procedure in the county and small claims courts, appear, primae facia, to be assisting Creditors in obtaining these orders, which cannot surely be in the National interest.

Be extremely careful in defaulting on your credit card payments you could lose much more than you bargained for including your home. We may have had the credit crunch which has restricted the flow and liquidity of money but we’ve yet to see the full force of the ‘Debit Crunch’ when the Credit Card and Loan companies want their money back, when your home will become at risk of repossession, even though you’ve always kept up with the mortgage repayments, for the smallest of debts, aided and abetted by the machinery of state through the Civil courts.

Protect your self with Unemployment Insurance, Income protection insurance for unemployed

Article Source: http://EzineArticles.com/?expert=Paul_Magus
http://EzineArticles.com/?Debit-Crunch—Credit-Card-and-Loan-Debts-May-Lead-to-Mortgage-Foreclosures&id=1697877

Related posts:

1. Credit Card Insurance is Essential in Credit Crunch
2. Credit Cards – time to bring the Banks to order!
3. Landlords and buy to let Insurance to beat credit crunch

The January job losses have yet to be taken into account and with the closure of many high street shops and the recently decimated manufacturing, financial and motor industries, we could see the official job loss rate of 6.3 rise dramatically this time next month when the January figures are published.

Is your job on the line?

Very few jobs are ‘safe’ in the current economic climate and it is worth considering

How you would protect your current position should the worst happen and you face redundancy?

What contingencies do you currently have in place should you find yourself unemployed?

Do you really know the monthly amount of outgoings you will need to sustain your current lifestyle?

IProtect are offering a whole new take on unemployment protection and income protection for unemployment by offering a wholistic ‘lifestyle insurance‘ policy thatis designed to maintain your existing lifestyle should you suddenly become incapacitated or unemployed through redundancy.

Visit Iprotect for lifestyle insurance information

Related posts:

1. UK Unemployment Figures Highest Since 1997
2. Lifestyle Insurance Cover – the new ASU and Income Protection
3. UK Finance Giants withdraw Unemployment Mortgage Protection Insurance for own employees

The future looks particularly bleak for the high street shops and the fall of Woolworths and their 27,000 employees on the dole, may look very small by Easter if the High Street manages to disappear at the rate it is shrinking – faster than the Polar Ice Caps. There will be an inevitable knock on effect for some High Street Insurance Brokers and the numbers are likely to shrink at the same rate as the rest of the retail market is collapsing!

If you work in retail we strongly recommend that you act quickly to take out income protection insurance. You will have to wait three months in order to claim as a matter of course, so act now! you can’t rely on state benefits to maintain your lifestyle through this economic crisis!

Related posts:

1. UK Unemployment Figures Highest Since 1997
2. Unemployent to drag UK further into Recession