Credit card cover costs GBP405 million less a year with Post Office
Post Office® research has found that if everyone in the UK who has credit card payment protection made two simple phone calls they could collectively save a staggering GBP405 million a year.
The Post Office® estimates that there are 10 million credit cards with payment protection in the UK2 and customers are currently spending GBP810 million annually protecting them – GBP405 million more than they need to.
The Post Office® is urging people not to automatically take cover with their credit card provider but look at other products available. For example, by switching to Lifestyle Protection from the Post Office®, a typical credit card customer with a balance of GBP5,000 would save themselves GBP17.00 a month or over GBP200 a year. 3
Post Office® Head of Marketing, Claire Oldstein, said: "Many people simply don’t realise how much money they are wasting on credit card protection, but actually they could save GBP405 million per year collectively.
"Lifestyle Protection is one of the cheapest and most flexible forms of payment protection on the market, not just for credit cards, but loans and mortgages too. At GBP4.50 per GBP100 of cover it beats the banks and major high street lenders. Credit cardholders currently overpaying for payment protection insurance could start saving today simply by making two quick phone calls; one to their credit card company and one to Post Office®. "
Lifestyle Protection can cover more than just your debts by protecting your monthly outgoings up to 60 per cent of your gross monthly salary. It offers a significantly better deal against many other payment protection policies including savings of up to GBP750 on personal loans4. And you can cover all your outgoings under just one policy.
Lifestyle Protection has been designed to offer customers a fair deal, responding specifically to the negativity surrounding overpriced PPI (payment protection insurance) cover, as outlined by Citizens Advice in its "Protection Racket" paper. 5
ENDS
Notes to editors
Product details:
' Covers monthly outgoings for up to 12 months if unable to work because of accident, sickness or unemployment plus life benefit of 12 times monthly benefit
' Sickness cover includes back and stress conditions (after first month, specialist evidence required from consultant)
' Only GBP4.50 per GBP100 of cover per month (inclusive of Insurance Premium Tax)
' Can insure between GBP100 – GBP2,500 a month (up to 60% of gross monthly income)
' Payments backdated to day one for accident, sickness or unemployment (subject to 30 day waiting period)
' Cover can be paid direct into customer’s bank account
' Available at www.postoffice.co.uk or by calling 0800 633 5967
Lifestyle Protection is underwritten by AXA Insurance UK plc, registered in England No. 78950, and AXA Sun Life plc, registered in England No. 3291349. Registered Offices: 5 Old Broad Street, London EC2N 1AD. Both authorised and regulated by the Financial Services Authority. Terms, conditions, exclusions and limitations apply, and full copy of the policy wording and complaints procedure is available on request or by visiting www.postoffice.co.uk.
Based on the overall credit card PPI premium figure of GBP810 million (per year) and the average commission this delivers to other providers, the UK could save GBP405 million each year by switching to Lifestyle Protection from the Post Office® (source: Defaqto report February 2006)
2 Post Office® Financial Services estimates that 10 million credit cards with PPI are currently in circulation in the UK (source BBA and Defaqto).
3 Source June 2006: Saving is based on a balance of GBP5,000 on an average of 33 credit card providers. Figure is based on data from lenders’ websites.
4 Source June 2006: Savings based on a GBP5,000 loan over three years on an average of 10 loan providers. Figure based on data from Moneyfacts.
5 For a full copy of the Citizens Advice "Protection Racket" report, visit: http://www.citizensadvice.org.uk/protection_racket_summary__final_sept_05.pdf
Savings – Regional Breakdowns (source: Defaqto 2006)
Percentage of UK Population Credit Cards with PPI How much can be saved by switching
Total 10,000,000.00 405,000,000.00
North East 4.24% 424,000.00 17,172,000.00
North West 11.43% 1,143,000.00 46,291,500.00
Yorks & Humber 8.40% 840,000.00 34,020,000.00
East Midlands 7.11% 711,000.00 28,795,500.00
West Midlands 8.95% 895,000.00 36,247,500.00
East 9.16% 916,000.00 37,098,000.00
London 12.42% 1,242,000.00 50,301,000.00
South East 13.55% 1,355,000.00 54,877,500.00
South West 8.37% 837,000.00 33,898,500.00
Wales 4.94% 494,000.00 20,007,000.00
Scotland 8.55% 855,000.00 34,627,500.00
Northern Ireland 2.87% 287,000.00 11,623,500.00
For more information please contact
Hayley Fowell
Royal Mail Press Office
148 Old Street
London
EC1V 9HQ
[email protected]
