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Financial ruin for one third of unemployed

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by David Masters

Almost one in three people in the UK would end up in financial disaster within two months if they faced unemployment.

In a new survey by MoneyExpert.com, 30% of respondents admitted that losing their job would leave them unable to make repayments on their mortgage and other debts within two months.

Half of these people (15%) confessed that they would be out of money within one month of being made redundant.

With unemployment already on the rise, and economic recession continuing to threaten jobs, very few people are taking up payment protection insurance (PPI), which covers repayments in the event of unemployment.

Around one quarter (26%) of people with personal loans have taken out PPI, whilst 37% of those with mortgages are covered.

Just 16% of credit card customers are insured, despite the average customer owing more than £2,000.

MoneyExpert.com believes the two reasons for low PPI take-up are criticisms of the industry by the Competition Commission, and the poor reputation of some providers who have refused to pay claims.

MoneyExpert.com director Sean Gardner said the results of the survey were ‘worrying’ given the current economic climate.

The survey was carried out by ICM, who questioned 1,440 people during December.

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News posted: December 18, 2008

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