We Introduce You

Perhaps unwisely for a someone who can earn commission on Payment Protection Insurance (PPI), I’ve mentioned a few times how you can save money by going to a specialist insurer rather than accepting the payment protection offered by the secured loan, loan or mortgage provider.

Well, this morning I thought - as I’ve mentioned this a few times, then perhaps I should back it up by mentioning some of the specialist companies who offer stand alone insurance.

I’m not an expert in Insurance (some may argue I’m not an expert in anything!) So I had to do a bit of early morning Internet digging. As with more or less everything in the finance world, it ended up being a bit of an eye opener.

First of all I thought I’d build up a list of the providers, then visit their websites, read their policies, look at their prices and then present a concise list on here - job done - I could then go away and enjoy the remainder of the Bank Holiday - but oh no - life’s not like that.

To start to build up my list I visited Moneysavingexpert.com, The Motley Fool and thisismoney. I purposefully missed out the price comparison sites Moneysupermarket and Uswitch - my argument being that Insurers would only appear if they had a commission deal with the site.

Moneysavingexpert said “A growing number of firms, such as Best Insurance, Paymentcare and British Insurance offer cheap policies”

The Motleyfool said “Get it from a cheaper ’stand-alone’ provider, such as: paymentcare, Helpupay, Best Insurance, British Insurance, Burgesses, mortgageprotect and the Post Office”.

Thisismoney just repeated the same companies, but I still thought - this is great I’ve only visited 3 sites and I’ve already got 7 providers. But then I did some investigation and found that Mortgageprotect and Helpupay are one and the same company - they are both trading names of Pinnacle Insurance PLC. I then discovered that Best Insurance, British Insurance and Burgesses are trading names of British Insurance Ltd. So Martin Lewis’s (the moneysavingexpert) ‘growing number of firms’ was actually an unimpressive list of two (but I note he has a commission scheme with both!) and The Motley Fool’s slightly more impressive list of seven was actually four.

I then did a little bit more digging and found that British Insurance Ltd. trade under the names - WAIT FOR IT - Burgesses-insurance, Burgesses, 123-mortgage-protection, Protectiononline, Instant-payment-protection, Shelter, Bestinsurance, Protectyourloan, Uvinsurance, - DEEP BREATH - Rhinoinsurance, Protectyourmortgage, Protectyourearnings, Biba-mortgage-protection , Safetyfirst, Insureyourmoney , Goodinsurance and Stokeinsurance and this isn’t even a comprehensive list, believe me there are more!

I then scratched my head - scratched it some more and came to the conclusion that if you’re looking for payment protection insurance then the following seem to be the best companies to go to:-

http://www.payprotect.co.uk/
http://www.pinnacle.co.uk/
http://www.paymentcare.co.uk/
http://www.britishinsurance.com
http://www.postoffice.co.uk

Please bear in mind that some form of payment protection schemes pay the money directly to you - if you find yourself in the unfortunate position of being unemployed this may effect your benefits as it is might be seen as income by the Jobcentre. Please also note that if you apply for the Post Office cover, the Post Office is only acting as an ‘Introducer’ for Axa and as always - if you’re taking out any financial commitment, it’s sometimes wise to seek professional advice.

I’ve been a bit of a busy bee for the last few days, so haven’t been able to update my beloved Blog. I think it’s like that for most of us - feast or famine - either thumb twiddling or fire fighting, but as one great sage said “The bad news is - time flies, the good news is - you’re the pilot”

Ah well - I’ve got a couple of things I’d like to briefly touch upon today that might effect the secured loans market.

Lets start with what some involved in the secured loans market might see as good news. It concerns Inheritance Tax. A number of lawyers and Independent Financial Advisers (IFAs) are predicting a surge in secured lending as a way of decreasing Inheritance Tax (IHT). This follows news, several weeks ago, when amendments to the Finance Act closed several tax loopholes.

Basically the surge is predicted because debts secured on property are devoid of IHT. So the Lawyers and IFAs are starting to advise people to take out a secured loan, give the money to their children and then for their children to set up a trust fund that pays the interest to their parents. To illustrate an example, if a family have assets of £2million but then take out a secured loan for £1million the estate is only valued at a million for tax purposes. This could result in a tax saving of £400,000 as long as the transaction took place seven years before death.

The other thing I’d like to discuss is not quite so good news for the industry. I’ve had time to read the recent report by the OFT into Payment Protection Insurance (PPI). It seems like the OFT want to move quickly on this one and whichever way you look at it the commission payments for the PPI element of secured loans will reduce within the next six months. I was originally going to take the OFT document and extract the points relevant to the secured loans industry and post them on here. However having now read the document it seemed more appropriate to create a page on here that includes more or less the full document. I’ll leave it on here until the dust settles and if you’re involved in the secured loans industry I suggest to take time out to read it.

Some interesting news has come out of the FSA and OFT this morning.

Following mooting the idea of transferring Consumer Credit responsibility from the OFT to the FSA in 2005, the two organisations have announced deeper collaboration. In the long term, this could have quite an affect on the Secured Loans industry.

Some of the cooperation between the organisations has already taken place and in May they both consolidated guidance on secured loans advertising. This led to a new document being incorporated into their websites that explains how to create a compliant advertisement.

Things that come out of today’s announcement affecting the Secured Loans industry are :-

• Producing a single guidance document for firms whose advertising is jointly regulated
• To consult on rule change to allow firms to use just one risk warning in credit advertising
• Feasability studies in aligning authorisation and licensing process
• Consider scope for combined regulation of Payment Protection Insurance

There are several more items that may affect us, for more details see this months Fair Trading Magazine