Help FTBs on the road to protection

IAIN MALLON, DIRECTOR OF PROTECTION MARKETING, AXA
IAIN MALLON, DIRECTOR OF PROTECTION MARKETING, AXA

In his Budget chancellor Alistair Darling announced an increase in the threshold at which Stamp Duty applies to house purchases.

First-time buyers buying a house for £250,000 or less will not have to pay the tax. This is expected to stimulate the housing market at the lower end as part of the climb out of recession.

Of course, if we see a rise in the number of first-time buyers we’ll also see an increase in the need for protection products to guard them against the financial implications of illness and death.

As an industry we need to ensure that the protection needs of this group of home owners are addressed as many may not be fully aware of the extent of their financial responsibilities and the implications of not having the appropriate insurance in place.

Understandably, first-timers – especially those pushing their finances to the limit to get on the property ladder – are likely to find their purse strings a little tight to begin with.

In some instances best advice will be to recommend a small amount of protection at an affordable price even if it doesn’t match the amount required to pay off an outstanding mortgage or cover monthly outgoings.

If the housing market gets a new lease of life following the Stamp Duty change there will be an opportunity for advisers to ensure customers have the right cover in place.

But convincing them to redirect the extra money they are paying for a pint of cider into a protection policy may be another matter.