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.

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 PPI 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.

News this week that two thirds of workers have not saved enough to manage their debts if they lost their jobs is a scary situation to be in, but it can easily be remedied by taking out a Payment Protection Insurance policy says PPI lobbyist Sara-Ann Burgess from specialist firm Burgesses.

Research recently undertaken by insolvency specialists MCR reveals 70% of workers only have enough money to last between a week and two months in the event of redundancy and 23% would have no idea how to manage their debts if their income went.

“These are staggering statistics,” opines Sara-Ann, “and clearly underlines the important role PPI policies have to play in these recession-hit times. PPI is the only mechanism that provides a cash boost to people who have been unable to stash away funds to meet future debts.”

The policy kicks-in if the claimant loses an income due to accident, sickness or unemployment and monthly premiums are priced dependent on the amount of benefit the policyholder is looking to receive. Tax free payments can be made for up to a year and cover is available specifically to meet mortgage, loan or credit card monthly repayment costs or to pay a wider range of bills such as rent, utility, council tax and food.

Despite its benefits, very few people opt to take out and claim on this cover. According to the Association of British Insurers there were 33,895 people claiming on the unemployment section of their policy in February this year. Given unemployment reached 2.2million earlier this month, Sara-Ann suggests more people should pay into a product that will prop them up financially when hard times strike.

She continues: “Around 1.5% of the unemployed are relying on PPI for an ‘income’, ahead of their savings, if they have any. This is pitifully low and I urge anyone worried about their financial situation and job security to consider this cover as an option.”

Surprisingly, MCR found that only 14% of respondents in its You Gov survey were concerned about losing their job, despite predictions from the Centre for Economics and Business Research that 334,000 jobs from the business services sector alone will go in the next five years. MCR did, however, find that more workers are taking steps to get prepared for a job loss - 64% professed to be changing their spending habits in a bid to better manage their debts. But the consultancy, along with Sara-Ann believe these actions are ‘too little, too late’.

She comments: “Any attempt to save funds for the future must be applauded, but in order to meet bill commitments for three months or so, most people would need thousands of pounds to cover the mortgage or rent, utility, tax, food etc. This means saving over a prolonged period of time, which for many is unachievable.”
Sara-Ann has for years called for lenders to lower their costs and make these policies more easily accessible to all, but instead they have increased their premiums and restricted unemployment cover to certain sectors. But Sara-Ann remains optimistic that independent PPI providers will continue to offer policies at competitive prices and provide cover for those looking for unemployment cover only.

She concludes: “Firms such as British Insurance charge £3.40 per £100 of benefit for unemployment cover, so a person paying £17 a month in premiums would receive £500 a month for up to a year. There are mechanisms out there to help people manage their finances when redundancy occurs and they do this without eating into any savings. After all, why should people lose their savings when there’s a low cost alternative that will keep those funds intact and still pay the bills? A monthly PPI policy costs less than a monthly digital tv subscription package or a take-away for a family of four.”

As retailers continue to vie for consumers attention by offering an ever-increasing number of ‘buy now, pay later’ deals, Payment Protection Insurance lobbyist Sara-Ann Burgess from specialist firm Burgesses is warning people not to be taken in by agreements that could end up costing them more than they bargained for.

The Finance and Leasing Association earlier this year said the number of consumers opting for store instalment credit deals – whereby they put down a small deposit or nothing at all, take their goods home and then pay off the lump sum with interest over a number of months - is steadily increasing, despite the uptake of credit in other areas slowing down.

In February and March this year, shoppers opting for store instalment credit deals grew by 8% and 24% respectively and a month later, the Confederation of British Industry reported April retail sales had risen by 44% - the highest rate since January 2008.

Although confidence to splash the cash via low-cost store deals appears high, shoppers are reluctant to take on higher-value financial commitments. According to the FLA, loans secured on borrowers’ homes fell by 76% in March 09, when compared to the same period last year. No surprise given unemployment now tops 2.2 million.

Sara-Ann is concerned that although a bit of retail therapy is a great moral booster in the short term; in the long term it is another financial burden that will drain resources further. She comments: “We all like to think we’re getting a bargain, but the final cost of the hire purchase deal will undoubtedly end up costing more than if the item had been bought outright.

“What happens if the monthly repayments cannot be met because of a drop or loss of income? The borrower will have spent months paying for something that’s now gone back to the store because of a default on payments, so there’s nothing to show for the early outlay.”

Debt agencies all advise against building up debt levels via store cards and hire purchase deals and agree that low-level debts collectively can prove crippling. Sara-Ann continues: “There’s only a certain amount of money available each month to pay debts and whilst offers to ‘take home now and pay later’ are very tempting, these goods will take-up a proportion of the monthly salary and add to the list of financial commitments such as the mortgage or rent, utility, tax and food bills.

“Anyone with a number of financial commitments should ensure they have the means to continue making their monthly repayments should redundancy occur. Unfortunately, for many people, their savings pots are shrinking leaving them to have to consider other options such as Income Payment Protection.”

IPP is a policy that pays a pre-determined monthly amount to the clamant in the event a salary goes due to accident, sickness or unemployment. Premiums are priced per £100 of benefit and policyholders can choose how much they would like to receive every month if their income is interrupted. The higher the benefit payout, the higher the premium.

Sara-Ann concludes: “In-store credit appears to be the favoured option at the moment, but let’s not lose sight of the fact that if it’s free now, it will cost more later and you will have to have the means to make that repayment, or risk losing it. In comparison, income protection offers the benefits later on. It costs as little as £3.40 per £100 of benefit for unemployment cover with independent providers such as British Insurance, so a person looking to receive £600 for up to a year to cover their commitments would pay a monthly premium of £20.40. This equates to a yearly premium of £244.80 which could in the future return an ‘income’ of £7,200.”

Independent Payment Protection insurer, British Insurance, has this week been voted the Best Mortgage Payment Protection Insurance Provider by visitors to The Complete Guide to Homebuying website.
This is the firm’s second award win of 2009 and is hot on the heels of an earlier accolade from Investment International magazine where readers voted it the Best Overall Insurance Provider.

The Homebuying awards asked consumers to rate mortgage and insurance providers in a number of categories. These included; ease of purchase, how easy it is to understand the information about the products on offer, buying experience, claims experience (where relevant), value for money and all-round service.

Yet again, British Insurance was way ahead of its competitors and received 6.5% more votes than its nearest contender. The consumer information website also publishes Mortgage Introducer magazine, the source of a number of British Insurance awards last year.

Guide Editor, Nia Williams, comments: “Once again British Insurance has won an award for offering the best MPPI product. We asked our readers to vote for the providers who they felt gave good value for money, a good range of products and a great service. British Insurance swept the board. MPPI is an area growing in importance as the threat of job losses continues and it doesn’t look like prospects are going to get better in the short to medium-term. It’s good to know there are still providers out there offering value for money to those who need it.”

British Insurance’s Managing Director, Simon Burgess, comments: “I’m delighted to have won a second award in such a short space of time. Now more than ever, consumers need to know there are PPI providers that give excellent value - both in the cover and services they provide and premiums they offer. These awards will hopefully instil greater confidence in consumers to purchase PPI and confirms that British Insurance will deliver during times of adversity.

“It also illustrates the point I frequently make, that consumers can get a better deal from independent firms and they shouldn’t be afraid to source PPI separate from their credit provider.”

The company’s products have a ‘five star’ rating from financial researchers Defaqto who after scrutinising 103 mortgage policies, placed the firm at ‘the very top of the market for its wide-ranging cover and support services’.

Burgess concludes: “British Insurance continues to win more awards than any other PPI provider and is one of a few with the statistics and accolades to prove we really do treat customers fairly. We enjoy a 100% customer retention rate and have never received a product or service complaint.”

Feedback from the Council of Mortgage Lenders on the Government’s proposed home-owner mortgage support scheme indicates that it’s not just Payment Protection Insurers who feel the initiative will benefit very few households and do little to tackle long-term debt problems.

When the Government announced its recommendations in December - asking lenders to allow homeowners to defer a proportion of their mortgage payments for up to two years - PPI lobbyist Sara-Ann Burgess cast doubt over the scheme, suggesting it will only prolong customers’ financial crises. Instead, she called for greater efforts to encourage people to put in place financial support mechanisms before they lose their job and increase their debt levels.

Sara-Ann explains: “Anyone scrutinising the Government’s proposals could see they had more holes than a colander. I said five weeks ago that the mortgage support scheme may well provide some temporary relief and stave off repossession for a while, but all it’s really doing is building up more debt for people who will have difficulty repaying an ever-increasing amount in a few years time.”

A view now shared by the CML who in its recent response to the Government’s consultation paper concedes ‘the costs and risks associated with arrears will have accumulated for longer than would normally have been allowed. That, in itself, makes it less likely that the borrower will ever be able to recover their position successfully. So, while the scheme avoids possession in the short term, it raises the risk of it in the longer term’.

Sara-Ann supports CML feedback when it says ’the proposed scheme is not suitable for everybody and may, in fact, only be an option for a relatively small number of borrowers who fall into arrears’ and believes that the other Government initiative – its recent extension to Income Support for Mortgage Interest payments (ISMI) - will also benefit very few. She says: “Less than 2% of homeowners currently qualify for ISMI as it’s means-tested, leaving 98% of the 11.7 million households with mortgages without any financial support.”

While Sara-Ann and the CML agree over the limitations of the mortgage support scheme, she’s concerned that only PPI providers are recommending PPI as the one proactive tangible solution that can stem the rising number of repossessions. Some 75,000 are predicted by the end of the year and as every day brings news of more job losses, it is feared that even this figure may be conservative.

She continues: “In its recommendations to help homeowners avoid repossessions, the CML suggests widening access to ISMI and developing a comprehensive sale and leaseback scheme which allows people to keep their homes, but change the owner. These are all measures to help people once they’ve fallen into debt and I’m saddened that no one is directing homeowners, and those renting or in social housing, towards PPI. “

PPI pays a monthly income for up to a year in the event of redundancy, accident or sickness and cover is purchased per £100 of monthly benefit, allowing the purchaser to determine the premium payments and income needed to meet the mortgage or wider household bills.

Sara-Ann concludes: “The CML is already suggesting the future impact on borrowers’ repayments may be very significant if they defer a high proportion of interest, so why would people want to store up more debt? Equally, having to sell your home to your lender could result in an emotional roller-coaster. PPI reduces the risk of these scenarios occurring – people will get their mortgages or rent paid, for up to a year, if they lose their job.

“I urge organisations to embrace a proactive approach and suggest solutions that will help prevent debt, rather than offer support when finances are suffering due to a loss of income. PPI will make a huge difference to people facing adversity and have a greater impact than any Government scheme or payout.”

Independent provider, British Insurance, charges £3.40 per £100 for unemployment cover, £3.90 per £100 for accident, sickness and unemployment and £1.90 per £100 for accident and sickness. It has policies for home owners, those renting and people in shared ownership schemes and offers a back to work assistance programme.

Financial services consumers across the board are likely to suffer because of the wholesale failings we have seen in the payment protection insurance (PPI) market in recent years.

According to Sara-Ann Burgess, a vocal and continuous campaigner for improvements in the PPI market, widespread problems with PPI are putting a huge strain on the Financial Ombudsman Service (FOS) and putting it under significant pressure.

In turn, Burgess said this made it more difficult for consumers with problems in other areas to seek and receive fast and effective redress.

Burgess said: “The Financial Ombudsman has dealt with over 25 000 PPI complaints this year. This has clearly put a very significant amount of pressure on its resources and made it difficult for consumers with problems in other areas to receive the kind of attention and service they are looking for.”

In its latest newsletter, the Financial Ombudsman admitted it was facing problems and said that if businesses took a greater responsibility for treating their customers fairly, then it would not be needed to adjudicate in so many near identical cases.

The FOS said: “Responding to large-scale surges in complaints driven by ’single-issue’ consumer campaigns… is now becoming a regular feature of our workload. Traditionally, of course, the ombudsman’s role was seen as dealing with individual disputes relating to one-off issues. The ombudsman’s office was regarded as a kind of craftsman’s workshop – not a factory for mass-production.”

Burgess bemoaned the fact that the changing pressures being placed upon the FOS meant it was being forced into dealing with large scale single issues rather than being able to devote large amounts of time to more diverse problems.

She commented: “When the FOS has the time to research and investigate the wide range of problems that come before it, it acts as a final line of regulation, highlighting issues as they begin to appear. Unfortunately this function is being lost and the FOS is having to behave almost like a front line regulator because nothing is being done to effectively deal with high profile, single issue problems.”

Burgess said she agreed with the FOS when it said: “Of course, the ideal solution would be for all financial businesses to treat their customers fairly (and to put things right when they go wrong) – either because businesses recognise this is the right thing to do, or because of effective regulatory scrutiny.”

Looking towards 2009, Burgess said she hoped the Financial Services Authority and senior management in the firms under its remit would look to work more effectively together and deal with future issues before they swarmed out of control.

Burgess said both the regulator and financial providers had missed many opportunities to correct the problems in the PPI market and were now paying the penalty.

“Firms like British Insurance have been railing against many of the procedures in the PPI market for many years and the action that has finally been taken has been too long in coming. Had the market followed the lead of independent, ethical providers such as British Insurance and been quicker to take itself in hand, there would not be nearly so many consumers looking to complain.”

In the future, Burgess said she hoped issues would be dealt with much more quickly and effectively preventing the need for consumers in their thousands having to individually fight for redress. In turn this would free up the FOS to deal with the type of complaints it was set up to handle.

As personal debt levels continue to spiral out of control and national charities are coming under increasing pressure to help people solve their financial problems, Payment Protection Insurance lobbyist Sara-Ann Burgess suggests a policy that pays a monthly benefit if redundancy occurs, could reduce the number of those suffering financial distress.

According to the debt advice charity, National Debtline, an average of 23,000 calls have been taken each month this year and its total up until the beginning of December was 241,153. In 2007, 208,224 calls were handled and in 1998 this figure was 116,608.

The majority of calls in 07 were from people with debts relating to bank and building society loans, overdrafts and credit card or store cards and one in four owed between £5,000 and £15,000.

Sara-Ann comments; “In the space of 10 years the number of callers has doubled, indicating just how irresponsible lenders and credit providers have been. They’ve authorised loans and credit to people who may not have had the means to repay their debts within a given timescale and given their full support to those keen to follow the mantra ‘buy now, pay later’.

“It’s only now, amidst a recession, that common sense is prevailing – lenders and credit providers are not so free and easy with their money and people are being encouraged to live within their means.”

With unemployment figures soaring and news of redundancies now a daily occurrence, Sara-Ann believes anyone with monthly bill commitments should undertake some proactive debt management in the form of a PPI policy that will meet those commitments should they lose an income stream.

“No one wants to see an increase in calls to National Debtline next year, but if people don’t put measures in place now to protect their financial security, then the number of calls will continue to rise to unprecedented levels.”

In anticipation of increased pressure on charities due to soaring debt levels, the Treasury is releasing £5.85m worth of funding over two years, allowing National Debtline to increase its capacity with the recruitment and training of up to 50 debt advisers.

The charity, which is run by the Money Advice Trust, says it will allow it to keep up with demand for debt advice and expects a high proportion of calls next year to be from consumers facing redundancy or the threat of mortgage repossession.

Sara-Ann continues: “PPI helps prevent the mountain of debt piling up and so will reduce the number of people compelled to contact debt advice charities. It provides monthly payments that will meet some or all of your monthly bills, dependent on the premium paid, and the outlay compared to the return is miniscule - less than one family take-away a month.”

Independent PPI provider British Insurance charges £3.40 per £100 for unemployment cover, £3.90 per £100 for accident, sickness and unemployment and £1.90 per £100 for accident and sickness. A person looking to receive a benefit of £600 per month for up to a year should a job loss occur would pay a monthly premium of £20.40.

British Insurance has policies for home owners, those renting and people in shared ownership schemes and offers a back to work assistance programme. It has this year won a string of accolades for its policies and way in which it treats customers fairly.

Sara-Ann concludes: It’s great to see the Government pumping so much money into charities to help them cope with the demand for their services, but wouldn’t it be better to proactively manage the situation now, rather than offer to help consumers when they are struggling?

“Measures need to be put in place to manage the debt before it gets out of control - perhaps some of the Government’s funding should have gone towards helping the most financially vulnerable pay for a PPI policy.”

Banks and building societies are failing their customers when selling Payment Protection Insurance and remiss when handling complaints according to PPI lobbyist Sara-Ann Burgess from Burgesses.
Her comments follow feedback from the Financial Ombudsman Service’s Chief Ombudsman, Walter Merricks, who recently voiced concern over the escalating number of PPI complaints his staff are having to deal with.

PPI pays a monthly benefit should an individual’s salary stop due to accident, sickness or unemployment, meeting bill commitments for up to a year. Whilst invaluable in this current economic climate, consumers are wary of a product that has drawn so many complaints and are turning their backs on this cover and leaving themselves unnecessarily exposed to financial hardship should redundancy or illness occur.

Since January this year, the FOS has received over 25,000 complaints relating to the sale of PPI. Merricks comments that traditionally, the Ombudsman’s role was seen as dealing with individual disputes relating to one-off issues and advises eyebrows would be raised at the FOS handling a workload involving thousands of similar complaints, all with the same financial product or problem.

Sara-Ann says: “It’s more than eyebrows that should be raised – the Financial Services Authority should heavily fine and ‘name and shame’ the perpetrators responsible for the highest proportion of complaints. Then it should ban them from selling PPI.”

She continues: “Lenders clearly don’t have the processes in place to treat customers fairly in the first place and then fail again, when it comes to handling complaints. It’s all too easy to fob-off dissatisfied customers in the hope they won’t want the hassle of having to contact the Ombudsman – well these figures prove otherwise.

“High Street PPI providers must get their act together in 2009 and evidence they really are doing the right thing – only then will the complaint figures come down. I’m sure they’d make changes if they thought they might lose this valuable income stream. It’s clear lenders don’t put customers first - they are arrogant, full of their own self-importance and undermining confidence in financial services as a whole.”

Merricks is also concerned that confidence in this sector is waning and warns that if businesses continue to be unable to puts things right when they are in the wrong then widespread redress to tackle widespread consumer detriment – ie a collective resolution – will be called for.

The FOS confirms that the majority of complaints are against the mainstream lenders and Sara-Ann believes a more effective and hard-hitting punishment is needed: “They obviously can’t be trusted to sell it in the right way to the right people, so only allow those who have a proven track record to sell the policies.”

Sara-Ann concludes: “Independent providers are a much safer bet – not only are the premiums more competitive, but the benefits are wider and consumers can be secure in the knowledge they will not be ripped-off. When properly sold PPI comes into its own during times of financial hardship – it allows claimants to keep their head above water via monthly insurance payouts that can be used to pay bills.

“Not only are the underhand tactics of lenders causing thousands of PPI policyholders to complain, but they are stopping thousands more from purchasing much-needed cover because the trust had gone. I urge consumers not to ‘tar all providers with the same brush’.”

Independent PPI provider, British Insurance, has this year won a string of accolades for its policies and way in which it treats customers fairly. The firm has a 100% customer retention rate and has never received a product or service complaint.

British Insurance charges £3.40 per £100 for unemployment cover, £3.90 per £100 for accident, sickness and unemployment and £1.90 per £100 for accident and sickness. It has policies for home owners, those renting and people in shared ownership schemes and offers a back to work assistance programme.

Consumers are being urged to check all of their payment protection insurance (PPI) policies in light of the huge fine that has been slapped on Egg Banking plc for serious failings in its sale of credit card PPI.

Sara-Ann Burgess, a director at PPI specialist Burgesses and a longstanding campaigner for a better PPI market, said the fine came as a timely reminder of the problems that still existed in the PPI market.

She commented: “I would say to anyone who has a PPI policy, that they should check exactly what it covers, what they are paying for it and make sure that it was something they actually wanted to take out in the first place.”

Burgess said too many people had been harried into buying a PPI product and either ended up with something they did not need or something that was not suitable for their circumstances.

This was not only a problem within the credit card sector, but also across the market, according to Burgess.

It was also important for consumers to make sure that they were not overpaying for the protection they had in place and Burgess said it was essential for consumers to look out their paperwork and see if there wasn’t a better deal on the market, that could provide them with the same cover, but cost them less each month.

“The policies that Egg has been fined for, relate to sales that were made between January 2005 and December 2007. Many individuals will have forgotten the details of their cover and just be used to the monthly amount they are paying for it. However for those who need the cover, it is very likely they will be able to find a cheaper alternative on the market through a provider such as British Insurance.”

In the past, Burgess said that the majority of consumers had taken PPI cover from the same firm that had offered them the credit. Whether buying from a mortgage, loan or credit card provider, Burgess said this tended to be an expensive way to go and urged consumers who had done this to take a moment to see if there might not be something cheaper available.

“PPI at its best is an excellent product and I would love to think that everyone who has bought PPI is getting value for money and enjoying the security afforded by the cover. However this simply is not the case as Egg’s fine all too clearly proves. Hopefully consumers will take the chance to review their own personal situation and make sure they are getting the best of what’s on offer.”

Burgess said specialist intermediaries like British Insurance would be able to guide consumers towards the best products available and in many cases would be able to rearrange the cover they had in place and save them money at the same time.

With borrowers facing such a tough financial climate, Burgess said such a move would help them cut their monthly outgoings without having to forgo their insurance.

Next year may be the year of the Ox as far as the Chinese calendar is concerned, but for borrowers in the UK it will be the year of protection.

The changing economic environment has made borrowers nervous of their ability to service their outstanding debt and made them more aware than ever of the risks presented by accident, sickness and unemployment, according to Sara-Ann Burgess, director at payment protection insurance (PPI) specialist Burgesses and a tireless campaigner for a fairer PPI market.

In the much leaner financial world that is unfolding before our eyes, Burgess said there was a growing realisation that should borrowers be hit by something that unexpectedly prevented them from earning, living up to their financial commitments would be very difficult. Increasingly she believed people would not take that risk heading into the New Year.

She said: “Whether it is city workers who are used to living high on the hog or factory workers with less lavish lifestyles, borrowers across the UK have got debt they need to pay off.”

Looking to the months ahead she added: “There is a growing sense among people right across the country that problems can come home to roost for anyone, and certainly I have not come across a single sector of the working community that believes it will be immune to the recession we are now in. People who have never considered taking out PPI in the past are now looking at it very seriously and I think we will see the market grow next year.”

Burgess said the need for financial providers to generate sales would also push them into offering ever more competitive rates and that this sort of pressure would be very welcome in the market.

For too long, Burgess said it had only been independent providers such as British Insurance that had really offered consumers the very best in both product flexibility and pricing, although she felt that more would have to follow suit if they wanted to win business.

Burgess explained: “There are a lot of proposed changes coming to the market about how and when PPI can be sold. Increasingly consumers are aware of the choices available and the changes will help them look past the high street credit providers they have normally bought protection from. I think we will see independent providers really excel in the coming year, while the high street banks and building societies will at last have to improve their offering if they want to compete.”

Burgess said this was great news for consumers and as more turned to the PPI market to help them stave of the financial threats posed by accident, sickness and unemployment, she believed the product and pricing they found would improve into 2009.

“2009 will be the year of protection,” she proclaimed.