The Office of National Statistics has released figures suggestiong that the £10 billion in PPI compensation payments that have been made is boosting the economy.
This is nothing new in March we published an article where an analysis by Which? showed that UK consumers paid out £50 billion for PPI protection since 1996. The article also highlighted some other PPI statistics provided by the ONS :
The Financial Ombudsman Service (FOS) has been buried by more than 600,000 complaints about PPI since 2000. Nearly half of those complaints have been filed since July1, 2012. Between that July date and the end of December in 2012, 283,251 complaints have been filed with the ombudsman. That was an increase of 110 percent over the previous six months.
Lloyd’s Group was hammered the hardest with 93,454 complaints. Of that total, 42,195 were related to PPI with 86 percent upheld. The Bank of Scotland was hit with 34,434 PPI claims with 81 percent upheld. Barclays saw 37,883 PPI complaints of which 77 percent were upheld.
PPI compensation spurs economy through spending boost
Economists have long speculated that the claims were underpinning household spending, but the ONS has not reinforced the theory until now.
In an economic review into household expenditure on cars last month, the ONS said: “A more recent influence on purchases of cars may be the compensation payouts to consumers made as a result of payment protection insurance mis-selling, amounting to a cumulative total of just over £10bn since the start of 2011. “The relatively large size of these payments offers households the potential to make large purchases, such as new cars, which they might otherwise have deferred. The timing of payments corresponds quite closely with the renewed pick-up in car purchases that began in 2011.”
Car sales have risen for 16 months running despite the squeeze on household incomes since the recession. In June alone, new car registrations jumped by 13.4pc to almost 215,000.
Economists had assumed the payments would help consumers and the recovery by adding almost 1pc to annual disposable incomes.
Simon Ward, chief economist at Henderson, said: “It has been a constant supporting factor for consumers for 18 months or so.” The scandal has also had a less direct impact on the economy, too, as thousands of people have been employed by banks to handle the claims and administer the payments.
Although the payments have helped household finances, they cannot explain the recent rise in consumer spending that is helping to drive growth. Mr Ward said a more important influence was the collapse in savings rates since the introduction of the Funding for Lending Scheme.
Original Article: www.telegraph.co.uk/finance/economics
Payment Protection Insurance: News
Payment Protection Insurance (PPI) Explained
Payment Protection Insurance (PPI) has played an interesting role in the world of finance over the past several years. This insurance product is intended to protect both the borrower and the lender in the event that the borrower becomes unable to make loan payments, but the product is often misunderstood.
RBS PPI Claims
Are you looking to make a PPI Claim against the Royal Bank of Scotland (RBS)? Below is all the information you need to make a RBS PPI Claim. If you are not successful in dealing with RBS directly, we are always here to help.
Lloyds TSB PPI Claims
Are you looking to make a PPI Claim against Lloyds TSB? Below is all the information you need to make a Lloyds PPI Claim. If you are not successful in dealing with Lloyds directly, we are always here to help.
PPI Claims – Leicester, UK
Maple Leaf Financial have a specialist team of solicitors dedicated to dealing with the mis-selling of payment protection Insurance (PPI) products by the banks in Leicester. We are happy to review these PPI products and to claim compensation for our clients where appropriate.
Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim
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