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, 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.
Unemployment Insurance has hit the headlines recently, mostly due to a rise in demand due to the recession, but also due to misselling of payment protection accident, sickess and unemployment insurance and the subsequent flood of claims.
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.
Payment Protection is the solution to National Debt management
InsuranceBlogger was calling for an overhaul of the way the Government manages unemployment back in November last year. The recent global economic events have seen record levels of unemployment in the UK. Now one of the UK's leading experts on the cost of Unemployment and lobbyist for the prevention of the mis-selling of Payment Protection Insurancehas stepped in with some interesting comments....
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!
A Quarter of Home Insurance Policies Cancelled As Recession Grips
One in four people have cancelled or not renewed their annual home insurance in order to save money during the recession, according to a recent survey carried out for the association of British insuraers (ABI)
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
12800 UK homes repossesed in the first quarter of 2009
Despite the UK government saying they eould help keep people in their homes there were over 12000 repossessions in the UK in first quarter of 2009.
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!
What a bunch of Bankers! UK Banks challenge PPI ruling
Feelings are running high this morning in the Payment Protection Market and the consumer pressure groups with news that Barclays and Lloyds TSB are challenging the Competition Commission's ruling to ban the sale of Payment Protection Insurance at the time of sale of a loan mortgage or credit.
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
iProtect assure Income Protection Insurance clients are covered for Swine Flu
Specialist provider of lifestyle insurance and income payment protection insurance products, iProtectinsurance.com have today not only assured their existing customers that they are covered for swine flu and it's after effects, but have also issued a rallying cry to those worried about whether they are covered or not, to switch any ASU policy today at no cost and with no exclusion penalties - you might even save a lot of money!
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.
reading the following article from ezines at looking at the housing repossession figures it appears that that the courts aren't necessarily taking the Governments advice to be lenient of debtors.
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.
Lifestyle Insurance: How to avoid the unemployment spectre
Yesterdays latest unemployment figures were rather depressing with the official count just bubbling under two milllion unemployed in the UK at 1.9m.
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
New face for the High Street as Unemployment worsens
We hope you had a good Christmas and everyone at Insurance Blog hopes you fare better in the New Year! But looking at the news and the statistical analysis, it looks like 'Things can only get.....worse. Yesterday the Chartered Institute for Personnel and Development predicted that unemployment will rise by 600,000 over the next year and with a further 400,000 temporary workers unable to find employment, by this time next year more than 2.8 million people will be officially unemployed. The CIPD predicts that the majority of the job losses will be before Easter, with 1600 people per day losing their job.
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!
The official umemployment figures have just been released and show that unemployment has risen to 1.86 million for the first time in eleven years or since Mr Blair's New Labour came into office to form the current government. The analysis shows that the worst hit areas are in the temporary worker sector where businesses are cutting back on staff due to rthe credit crunch. The worst hit group of people where unemployment has hit hardest is for the young. Under twenty fives are coming under increasing unemployment with one in seven unemployed, and it is extremely hard for someone just leaving education to find employment. Over 1 million people are claiming jobseekers allowance.
You can protect yourselves against the risks of unemployment in 2009 by purchasing a variety of unemployment insurance or redundancy insurance solutions. Independent suppliers offer a range of products for income and lifestyle protection
The financial turmoil and dramatic drop-off in business conditions over the past two months have darkened the economic outlook for 2009 even further, the Confederation of British Tndustry (CBI) warned today.
In its revised economic forecast, the CBI predicts that the recession which it says, started in the third quarter of 2008 will now run for most of 2009 and see unemployment peak close to 2.9m. Some unofficial figures already report unemployment to be in excess of 3 million. Officially Unemployment is expected to reach the two million mark by the end of 2008, with the jobless rate rising to 6.5%. The number out of work is currently expected to peak at around 2.9 million (9%) by mid 2010. With this in mind it would be prudent for those still in work to purchase income payment protection insurance.
The CBI has downgraded its growth predictions for 2008 and 2009, following the severe impact on confidence and business activity from the financial turmoil in October 2008. GDP growth for 2008 has been revised down from 1.1% to 0.8%, and in 2009 the CBI now expects the economy to contract by 1.7%, against its forecast in September of 0.3% growth. These figures are closely paralleled to those of the Treasury predictions The economy is expected to shrink quarter-on-quarter by 0.8% between October and December this year, and to contract again for a subsequent three quarters before beginning a slow recovery through 2010.
As the economy slows sharply over the coming year and commodity prices continue to ease, CPI inflation is expected to fall from 4.2% this quarter to 1.7% by the end of 2009, undershooting the Bank of England’s 2% target. Into 2010, inflation is likely to fall back further to a low of 1.1%, averaging just 1.2% over the year. The drop in inflationary pressure will give further room to the Bank to make a series of rate cuts over the coming six months to bring the Bank rate to possibly as low as 1.5%.
John Cridland, CBI Deputy Director-General, said: “Since the last forecast in September the banking system has come under immense strain, sending consumer and business confidence has plummeted in its wake. Given the speed and force at which the economic downturn has occurred, we have reassessed and downgraded our expectations for UK future economic growth. But the fast-moving and global nature of this crisis means it is impossible to look far ahead with any certainty. What is clear is that the short and shallow recession we had hoped for a matter of months ago is now likely to be deeper and longer lasting. An unwelcome consequence of the downturn will be a significant loss of jobs, many of them in sectors that have been relatively insulated until now.”
Lack of confidence among consumers will dampen household spending and the CBI predicts that household consumption will contract by 1.8% in 2009.
Investment forecasts have also been downgraded on the back of the falls in business confidence. The CBI predicts fixed investment will shrink by 3.8% in 2008 and 10.5% in 2009.
The CBI estimates that public borrowing will increase sharply during the recession. Net borrowing for 2008/09 is expected to hit £69.9bn and £93.8bn in 2009/10, which represent 4.8% and 6.4% of GDP respectively.
Ian McCafferty, CBI Chief Economic Adviser, said. “This latest forecast shows that 2009 is going to be a very tough year for business, with the sharpest fall in GDP since 1991. Most worrying are the increasing signs that the credit crunch is now reaching the corporate sector. Since October's financial turmoil, companies have started to report that, for the first time, they are finding it increasingly difficult to access capital. If this were to be more than a temporary phenomenon, it would result in otherwise healthy companies going to the wall for lack of short term finance. This would have serious implications for both employment and investment."
Hurrah ! Now we the taxpayers rescue another failed business - Bradford and Bingley - and as a country are now the proud sponsors of Bradford City FC (as well as Newcastle Utd!).
Bradford and Bingley (aka The Government) also sponsor the Bradford Bulls Foundation, Yorkshire County Cricket Club Indoor Cricket Centre and Bradford and Bingley RFC incidently.
Bradford and Bingley were one of the major culprits in the creation of the Credit Crunch with their ridiculous overloading of buy to let mortgages and self certified mortgages accounting for over 80% of their business, and directly accounting for the outrageous growth in house prices. It was bound to fail and City Analysts were predicting months ago that their shares were worth nothing -much to the annoyance of the banking sector!
It Stinks - these bad businessmen are allowed to create a house of cards in the UK housing market and walk away from it leaving us the taxpayers to pick up the pieces - whatever happened to the free market? And where were the FSA in all this?
On an Insurance front their book of business is relatively small in the larger scheme of things with a lot of home insurance particularly landlord insurance cover and mortgage protection insurance policies sold on the back mortgages.
Our advice to anyone holding these policies is to switch today. This applies particulary mortgage payment protection which is a monthly policy and is easy to cancel and set up elsewhere. With lenders charging more than five times the rates for this type of insurance than the independent sector - you would be wise to switch mortgage insurance today
Fantastic Value unemployment PPI products released to cope with Credit Crunch
Safety First has announced the release of Unemployment only mortgage , income and loan protection products, backed by Munich Re to cope with the demand caused by the gloom in the money markets and the credit crunch.
These products are not age related and offer better value for money as the premiums do not increase each year. Monthly premiums, flat rated lfestyle related, these insurances offer great value for all employees looking to safeguard their short and long term future in an increasingly unstable economic environment.
Safety First welcome employees from within the banking, insurance and finance sectors.
Unlike many other products on the market, you are covered for unemployment after just the first month from which you take out cover.
UK Finance Giants withdraw Unemployment Mortgage Protection Insurance for own employees
Insurers may withdraw Mortgage Protection Insurance cover to their own employees
In the wake of the credit crunch, collapse of Lehman Bros. , the inevitable threat hanging over the future of Amercian insurance giant AIG, and the unprecedented collapse of UK Insurance giant HBOS shares by 40% in one day, you could argue that MPPI unemployment Insurers are right to worry and already some capital lenders are refusing to offer payment protection insurance to homeowners and employees who work for banks and building societies. Some Underwriters have gone further becoming more risk averse and have included all financial services sector workers including insurance company employees, IFAS and insurance broker staff. This adds to the growing list of trades and professions who are now finding it increasingly difficult to puchase unemployment insurance to protect their mortgages, income level or loans.
Construction workers, estate agents, conveyancing solicitors and services and more recently removal firm staff can no longer easily purchase mortgage payment protection insurance or the other products that could ease the pain of being unemployed.
The move could be indicative that the UK Insurance market is heading for recession. Insurance Staff have been made unemployed gradually over the the last six months, with a recent 6000 redundancies at Norwich Union flying under the general radar, with other insurance company giants creating redundancy hitlists.
A spokesperson for Personal Accident - one of the UK's largest online independent mortgage protection insurance providers, who compare policies on price and cover - said, "It's true that we have received notices from some of our underwriters withdrawing certain particular income related unemployment cover for a list of trades within the financial services sector. However we can still offer age-related policies for income protection insurance and mortgage protection insurance to all bank and building society staff, which generally offer better cover at lower prices as they are not lifestyle rated and available to anyone. As these are monthly policies they are simple to change midstream - you could save yourself a fortune in premiums if you switch your policy from a bank or building society and a lot of worry if you are unfortunate and join the ranks of the mass unemployed, or your building society or bank collapses leaving your policy worthless. Could you meet your mortgage repayments or pay bills without a job? These are very worrying times...."
Simon Burgess head of independent provider Burgesses agreed. "Age-related unemploment insurance offers the best solution to financial services workers who may be threatened with unemployment. We offer policies to cover your mortgage, wages or debts whilst you are unemployed. I would however advise anyone thinking of protecting themselves from financial harm if they lose their job, to act fast as there is a ninety day exclusion no claims period from the start of the policy." He added, "Although our mortgage protection insurance has seen a downturn with the number of new mortgages being taken out virtually non-existant due to the credit crunch, we have recently seen a sharp rise in the number of unemployment insurance applications, particularly from workers in financial services."
So it appears that if you want to be able to pay your mortgage in three months time or still have an income you should take out payment protection insurance cover today. This is particularly prudent for financial services sector workers whose jobs appear to be most at risk.
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