Unemployment + PPI Can Break Arrears/Repossession/Eviction Cycle

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This week's shocking unemployment news and spiralling repossession figures should galvanise those without Payment Protection Insurance to take out a policy and ensure their mortgage and other monthly bills are paid in the event of redundancy says PPI lobbyist Sara-Ann Burgess from specialist firm Burgesses.

Sara-Ann Burgess, MD Burgesses

Those with financial commitments only need to siphon off a small percentage of the money they've saved due to the recent interest rate, VAT and utility bill cuts and they can enjoy peace of mind, secure in the knowledge there's a safety net in place to pay bills should they lose an income.

This week's shocking unemployment news and spiralling repossession figures should galvanise those without Payment Protection Insurance to take out a policy and ensure their mortgage and other monthly bills are paid in the event of redundancy says PPI lobbyist Sara-Ann Burgess from specialist firm Burgesses.

For the first time since 1997, unemployment has topped two million and there are predictions this will exceed 3 million within a year, resulting in one in 10 workers without jobs by 2010. By the end of 2008, repossessions soared by 68% to 46,750, including those forced into giving up their homes by 'second charge' consolidation loan companies.

Widespread redundancies and falling incomes contributed to repossessions and an increasing number of homeowners in arrears of three months of more. Last year around 377,000 households were behind with their payments, indicating the intense financial hardship being experienced across the UK.

Given the current dire economic climate and suggestions that things will worsen before they get better, Sara-Ann cannot understand why more people aren't shoring up their finances and buying PPI. She comments: "We all know rising unemployment results in higher arrears and repossessions, yet very few people take the opportunity to break this cycle. Why face stress and hardship when you don't have to? PPI pays the mortgage or rent for up to a year if redundancy occurs, ensuring unemployment will not equal arrears, repossession or being evicted by a landlord."

Sara-Ann calculates less than 1% of unemployed people are currently drawing a monthly 'salary' courtesy of PPI - her figure is based on 19,105 PPI unemployment claims made up to November 2008, as a proportion of the 2.03m out of work. She suggests: "This is a scandalous statistic - so many more people could benefit from a monthly cash injection, courtesy of the insurance sector, but they're ignoring this option.

"Those with financial commitments only need to siphon off a small percentage of the money they've saved due to the recent interest rate, VAT and utility bill cuts and they can enjoy peace of mind, secure in the knowledge there's a safety net in place to pay bills should they lose an income."
Sara-Ann continues: "There's no hidden agenda, insurers will pay the claim, providing job cuts weren't announced prior to or four months after the purchase of a policy. Very few are eligible for benefits from the State and despite the Government announcing a series of measures to help cash-strapped homeowners, they will have little effect on those in debt and do nothing to help people in rented accommodation."

Payments made via Income Support for Mortgage Interest schemes (ISMI) have been brought forward so benefits are received after three instead of nine months and homeowners will soon be able to defer a proportion of their mortgage interest payments. However, Sara-Ann counters less than 2% of households on means tested benefits will qualify for ISMI and the holiday payment facility serves to only increase the mortgage debt, as interest will continue to be added to the outstanding loan.

She concludes: "The International Monetary Fund says the UK recession could last longer than any of the world's major economies, so avoid building up further angst in the future and recession-proof your finances now. I appreciate the PPI sector has a poor reputation for over-pricing and mis-selling PPI, but independent providers are not guilty of this. They provide outstanding value, treat customers fairly and explain everything up-front."

Standalone firm, British Insurance, has won numerous awards for its products, back to work assistance programme and service delivery and has policies for homeowners, those renting and people in shared ownership schemes. Premiums are calculated per £100 of benefit and standalone firm British Insurance charges £3.40 per £100 for unemployment cover. Anyone looking for a monthly replacement income of £500 would pay £17 a month.

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