Compiled by The Insolvency Service, the figures just released for England and Wales are up by 4.6% over the year and 8.8% on the previous quarter. The unfortunate truth, according to Sara-Ann Burgess, a longstanding campaigner in the PPI market, is that there is worse to come.
“Insolvency does not happen overnight and despite the recent cuts in the Bank of England Base Rate, there are a lot of people in serious financial straits because of the deteriorating labour market and the ongoing problems with securing credit.”
Although it was easy credit that created many of the insolvency problems we are facing, Burgess said the period of readjustment was very difficult when access to finance dried up.
She urged consumers to take time to assess their financial position and to draw up a budget for the weeks and months ahead. While cutting down on expenditure was going to be necessary for many, she said it was very important to make sure existing financial commitments could be met in the event of accident, sickness or unemployment.
“Life rarely goes according to plan and when we are blown off course by accident, sickness or unemployment, it often makes paying the bills impossible. PPI stops people getting knocked off their feet and gives them some breathing space. Without it, avoiding insolvency will be impossible for a growing number of people.”
According to Burgess, consumers should examine the financial safety nets below them. What is their redundancy package at work like? Would they be eligible for state benefits? Could they last until they kicked in? Are there savings to tide them over?
“People need to have a plan in place to protect themselves. If they couldn’t survive a change in their circumstances they should look at PPI. Ethical, low cost intermediaries like British Insurance will help consumers get policies that are suitable for their needs at a fraction of the cost charged by high street providers,” said Burgess.
With significantly over 100,000 people below set to become insolvent in the coming 12 months and thousands more to be hamstrung by financial problems, Burgess hoped more consumers would see good value PPI as a priority.
