Worries about unemployment are boosting demand for PPI

Job uncertainty caused by the credit crunch is bolstering demand for payment protection insurance.

PPI provider Paymentcare.co.uk says it saw enquiries for standalone PPI shoot up by nearly 50% in the week Lloyds TSB’s takeover of HBOS was unveiled.

Shane Craig, managing director of Paymentcare.co.uk, says it has been inundated with calls, many from consumers unable to afford the protection deals being offered by high street lenders.

He says: “We are being bombarded with enquiries from consumers and the common theme is that individuals are finding the deals offered by high street lenders exorbitantly expensive.

“A growing number of applicants are telling us they have always thought PPI was a good thing but simply can’t afford theprices some high street lenders are charging.”

Craig adds that the economy looks to be toppling into recession and it makes more sense for consumers to take out PPI in the prevailing economic conditions than may have been the case in the past.

Sandy McPherson, head of marketing at Paymentshield, says it has also seen a surge in demand for PPI in the past three months and that this could be a result of increased awareness of the product combined with despair in the face of a failing economy.

He says: “I think consumers are starting to worry about how they are going to repay their loans or mortgages.

“It is becoming the norm for them to source their insurance from different providers from their loans.”

McPherson adds: “High street lenders are not necessarily more expensive but it normally works out cheaper to take out a loan with one lender and insurance from a different provider.”