Public Sector Employees Facing Redundancy Should Consider Unemployment Insurance
With the recession officially over and 0.5 percent growth in the last quarter of 2009 you might be fooled in believing that unemployment is a thing of the past.
The grim truth is that every day up and down the country people are still losing their jobs in the thousands.
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, howeve
r 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.
Labels: income protection, lifestyle insurance, mortgage protection, mortgage protection insurance, Quantitative Easing, redundancy insurance, UK government, unemployment, unemployment insurance
Green Shoots in the UK Economy and Markets?
There's been a lot of positive talk in the UK housing market over the last few days or so........Onward Christian Soldiers.....
Relaxation of the credit stanglehold?
Total net lending to individuals rose by £0.3 billion in October. The twelve-month growth rate fell to 0.7%, and the three-month annualised growth rate increased 0.3% to 0.5%, according to new figures from the Bank of England.
Money for New Mortgages?
The value of building society mortgage approvals in October was £1,511 million - broadly in line with the £1,565 million of approvals in September according to new figures from the Building Societies Association.
Gross lending also remained steady with £1,666 million being lent in October compared to £1,605 million in September.
Within the total, net lending secured on dwellings increased by £0.9 billion, in line with the September increase and above the previous six-month average of £0.6bn. The twelve-month growth rate was unchanged, at 0.8%. The three-month annualised growth rate increased 0.4 percentage points to 1.0%. Within total secured lending, secured lending by banks (excluding the effects of securitisations) increased by £3.1 billion, slightly below the September increase (£3.3bn) but above the six-month average of £2.6bn.
The number of loan approvals for house purchase (57,345) was above the September figure (56,205) and above the previous six-month average, whereas approvals for remortgaging (24,596) were below both the September figure and the previous six-month average.The number of loans approved for other purposes (29,195) was higher than in September and higher than the previous six-month average.
Credit Cards - Britains 'Secret' loan sharks!
Consumer credit fell by a net £0.6 billion, below the previous six month average of -£0.1bn. Credit card lending increased by £0.1 billion and other loans and advances fell by £0.7 billion. The annual growth rate of consumer credit continued to fall, to -0.1%; the three-month annualised growth rate fell to -2.2%.
Housing Market still in Cheyne-Stokes
House prices grew by 0.2% in November according to the latest national house price survey published by Hometrack, the housing intelligence business - the fourth consecutive increase in prices, bringing the year on year rate of house price growth to -2.9%.
Commenting on this month's survey, Richard Donnell, Director of Research said:
“There are three distinct elements to the latest results from this and other recent surveys. This first is that prices continue to post month on month increases. The second is the extent of prices rises across the country and the number of households who have seen an improvement in market conditions over 2009. The third, and most important element, is the short term outlook for prices.”
“This is the third consecutive month that the survey has posted a 0.2% price rise. Add to this a growth in sales volumes and it is easy to see how agents are beginning to feel more confident about sustainable pricing levels - at least in the short term. But this pick up in market activity and prices is not one that has been felt across the whole country. The stark reality is that there are large swathes of the country where prices have remained unchanged or have seen continued price falls.”
Over the last 6 months London and the South East have consistently seen the largest number of postcodes registering price rises - values are up across 78% of London and over half of the South East. Yet in five regions less than 20% of the market has registered any price rise.
Personally I see nothing in these indicators to warrant any change of course by the Bank of England regarding Interest Rates.
It is quite clear however that the money invested by the British people into the Quantitive Easing 'project' is clearly designed to line the pockets of those within the system where the money will not 'trickle down' into the general money supply.
The credit strangulation of SME's and individuals is as bad as ever!
Labels: Business, Consumer Credit Law, credit cards, credit crunch, Debt, Economy, House prices, housing market, money supply, Money System, pump priming, Quantitative Easing, UK government
Insurance Companies buy more UK Government Debt
The Bank of England has just announced that the latest efforts at so called Quantitative Easing involves the injection of another £25 billion of made up money in the circular flow of money system, which means that since the recession Britain has generated £200 billion of made up debt!
So Where's the money gone? And what is Quantitive Easing anyway
It turns out that QE as the press now like to call it, is radically different from the Pump Priming developed by FDR in 1930 to get the States out of the Great Depression!
And this explains why you and me, the small and medium sized enterprise and it's workers are not getting any credit or money!
Truth of the matter is QE is designed to shore up the internal arteries of the international banking system and not leak any money out. To leak money by the creation of credit to the general public and increasing the money supply would introduce both inflationary and currency exchange pressures that would be far from welcome in the current economic climate.
So here is how QE works - The UK Government decides to make up some more cash to shore up the banking system. It creates £25 billion pound worth of bonds that it says you and me will repay! It then instructs the Bank of England which sells them to Banks. They make a nice profit by selling them onto - have you guessed it yet?
Yes 95% of the guilts and bonds go to INSURANCE COMPANIES! Very little money is being released to the public system.
It just means that today the Government decided that You, Me and Everybody! - in the UK, now owes another £25 billion of made up money plus the made up Interest, to Aviva et al.
So QE cannot have any beneficial effects to the likes of you and me, Joe Public, except the potential ability to stave off a second wave of recession by keeping the banks ticking over!
Pump Priming conversely is a 'lets spend our way out the crap' solution which would only work in the UK if the money is diverted into the public sector.
Why just the public sector?
Because only large national institutions have enough employees to spread the money to all parts of the system before it returns to the investment banks.
Like all system solutions they have to be top down and bottom up!
The recession will not come to an end in this country until we start pumping it into the bottom!
Labels: Bank of England, credit crunch, Insurance companies, money supply, Money System, pump priming, Quantitative Easing, UK government
