Consumers must proactively seek to protect themselves in the face of a rising tide of unemployment and take responsibility for their own long-term financial health, says payment protection insurance specialist, Burgesses.
The Confederation of British Industry (CBI) has significantly revised its economic outlook and in its most recent forecast, released 15 September 2008, believes the UK is now entering a recession that will put hundreds of thousands of people out of work.
The CBI believes unemployment will rise over the course of the coming months, breaking the 2 million barrier in 2009. This is a very much bleaker outlook than the CBI gave earlier in the year when it said the UK would avoid recession and is a clear indication of just how bad things are likely to get.
Given the deteriorating economic situation, Sara-Ann Burgess, director at Burgesses, says it is up to each and every individual to take responsibility for their own financial situation and make sure it was sustainable in the changing environment. While UK consumers have been quick to take on debt, not all had been so quick to make sure they could pay it back and in a faltering economy, such provisions will prove essential.
Burgess says: “Hundreds of thousands of people are going to lose their jobs over the coming months and this is going to make it very difficult for many of them to meet their financial commitments. Finding new jobs is not going to be as easy as it has been in recent years and for those that do not have savings to meet the mortgage or pay their monthly credit card bills, getting insurance in place now will help them avoid financial disaster if they are made redundant. There is robust, low cost protection insurance available in the market despite some of the bad press the protection industry has received. Those who would be unable to pay their mortgage if they were made redundant should investigate their options. This economic storm is going to get worse before it gets better and consumers must protect themselves.”
Despite changes to the Income Support for Mortgage Interest benefit, which will come into force next year, the vast majority of consumers will receive no help with their mortgage should they be unable to pay due to redundancy.
In the current climate, hoping that your bank or building society will be kind to you if you struggle to pay the mortgage, is a vain one as they may have bigger problems of their own.