Rising debts and the lack of a financial buffer: Why it’s time for consumers to put in a PPI reclaim

The economy may have come out of the doldrums as recent figures point to a 0.1% rise in the three months to March. However, it appears that consumers have yet to feel the effects of improved economic conditions – with the UK set to be stuck in a “depression” until 2015, according to the National Institute of Economic and Social Research (NIESR).

With cash-strapped consumers potentially facing an ongoing struggle to make ends meet as the economy makes a slow upturn, here are just some of the reasons why Brits should look into the possibility of a PPI reclaim today:

Rising debts

UK consumers are still crumbling under the weight of their debt mountains, with the latest figures from money education charity Credit Action showing that outstanding personal debt stood at £1.424 trillion at the end of February 2013, up from a figure of 1.408 trillion at the end of February 2012.

Average household debt (including mortgages) now stands at £54,017, with average consumer borrowing (including credit cards, motor and retail finance deals, overdrafts and unsecured loans) rising to £3,218 in February 2013.

Lack of a financial buffer

A recent report by housing charity Shelter revealed that millions of consumers would struggle to pay their rent or mortgage if they lost their job – even in the first month – and couldn’t find a new one shortly after.

The charity also warned that changes to welfare benefits could mean that even more pressure could be put on consumers’ finances in the coming months.

Campbell Robb, chief executive of Shelter, said: “These figures paint an alarming picture of a nation where the buffer between having a home and potentially becomes homeless is a single pay cheque.”

Processing your PPI claim

Putting in a reclaim for Payment Protection Insurance (PPI) if you were mis-sold the insurance could help consumers put an average of £3,750 (iSmart average loan compensation – December 2012) in compensation back into their pockets.

The specific insurance product was mis-sold to consumers alongside a whole range of additional financial products over the last decade. Anyone who took out a credit card, mortgage or even a simple loan may well have had PPI included in their overall payment package, with many people not even aware that this was happening.

Anyone who was a victim of mis-selling in this sense may now be in a very strong position to put forward a credible compensation claim.

It may initially seem daunting to figure out how you should begin this process but the key is that you are able to dig out all of the relevant financial records which display the PPI policy which you have purchased. Once you have done this you can work with a claims specialist to determine whether you were mis-sold the policy.