Archive for November, 2017

Poorer households lose out from ‘the insurance gap’

The insurance gap means some poorer households don’t have contents insurance

Some sixteen million people in the UK don’t have contents insurance, according to new research. And what’s more, they’re mainly from poorer households meaning they couldn’t afford to replace household items if they needed to. This is the insurance gap – where those who can’t afford cover could miss out.

Now a group of MPs, peers and charities are looking at how this could change. We’ll take you through what the insurance gap is and how it can affect poorer families. And we’ll also look at some of the ways that this could improve in the future.

What is the insurance gap?

As we explained above, the insurance gap is when poorer households can’t afford the cost of contents insurance. There are other reasons why they might not get contents insurance – such as that they don’t trust the insurance industry.

According to the research, the majority of those without contents insurance are tenants. It found that poorer households were also more at risk of burglary, arson and flooding – so contents insurance would definitely be important.

But the reason these households didn’t have contents insurance was because they couldn’t get an affordable policy. This meant that if they lost or broke a household item or there was a break-in, they’d have to cover the cost of new items on their own.

As these families are on lower incomes, it’s likely that they couldn’t afford to do this outright. The research shows that only a quarter of social housing residents have enough savings to replace a washing machine. This could mean they’d have to borrow from friends or family members to afford a new one, or to turn to credit. Or if they couldn’t do this, they’d have to go without.

This research was for the Financial Inclusion Commission. This is an independent campaigning body aiming to encourage financial inclusion. And this is the group who are looking to get rid of the insurance gap going forwards.

What is the Financial Inclusion Commission suggesting?

One proposal is that social landlords could automatically sign tenants up for contents insurance, but let them opt out of this. This would ensure that social tenants had contents insurance by default. If they still couldn’t afford to pay for it, they would be able to stop the cover.

Another initiative is to teach people about the value of contents insurance. If people understood how contents insurance could protect them in the event of a break-in or a fire, they might be less likely to opt out of its protection.

The Financial Inclusion Commission also said that the insurance sector needs to make sure that everyone has access to contents insurance. It’s now calling on the Government to develop a financial inclusion strategy, and this would ensure that all people were able to get the level of insurance cover they need.

One Advice Group appoint Nick Pearson as Group External Relations Manager

Nick Pearson, Group External Relations Manager at the One Advice Group

Harrington Brooks, one of the UK’s leading debt solution providers and part of the One Advice Group, has appointed Nick Pearson to the role of Group External Relations Manager. He starts with immediate effect and will be focusing on meeting the creditor partners with which the Group currently has circa £800 million of debts under management for 50,000 customers nationwide.

Nick Pearson – well known debt expert

Until recently, Nick was the Chief Executive of The Debt Counsellors Charitable Trust and has worked in the not for profit and commercial debt solutions sectors for nearly 35 years. He started as a specialist debt adviser at the Citizens Advice Bureau and held various senior positions for a number of different organisations including local authority councils, and independent advice centres.

From 2009 to 2013 whilst on the board of industry trade body, the Debt Managers Standards Association (DEMSA), Nick was instrumental in promoting industry best practice and a Code of Conduct which was formulated to protect the interests of the public and the lenders to whom they owe money.

More recently, Nick spent 2 years on the Board of the Institute of Money Advisers (IMA); originally the Money Advice Association; the only professional body acting solely for money advisers in England, Wales and Northern Ireland.

Nick commented: “I am pleased to be joining One Advice Group. The colleagues and management of the Group are clearly committed to ensuring that the needs and best interests of the consumer are at the very heart of the business so I had no hesitation in accepting this new challenge. I have always believed that the UK needs a mixed economy of free and fee charging debt advice provision to tackle the growing personal debt crisis in the UK.

“The consumer credit sector is facing significant change, with the Money Advice Service’s ongoing review of advice funding and the Government’s promise to introduce a statutory breathing space mechanism. While these initiatives should help, it is vital that consumers are able to access debt support easily, fairly and though whatever source best suits them.”

Nick’s remit at the One Advice Group

Matthew Cheetham, CEO of the One Advice Group said: “Through his expertise and dedication, Nick has established himself as a key voice in the debt resolution and money advice sectors. He is well respected and vocal in terms of his desire to influence policy, practice and create positive customer outcomes. He speaks with the experience of an advisor and with a consumer focused lens”.

Nick’s remit is to ensure Harrington Brooks and One Advice Group maintain excellent relationships with creditors and professional partners with whom customers have debts under management and to support with customer focused initiatives currently ongoing which will generate better outcomes for both Creditors and Customers.