Consumers concerned by their banks

A survey carried out by Moneyfacts in April found that 83 per cent of almost 300 consumers expressed concern over the amount that banks routinely lend, while only just over half (54 per cent) said they trusted their own bank to guide them effectively.

Significantly the number who said they trusted their bank was also only eight per cent higher than the number who said they did not (46 per cent).

With personal debt levels and bankruptcy continuing to rise with the “live for today mentality”, banks are coming under increasing pressure to run more effective checks on the credit history of their customers, ensuring they are likely to be able to repay any loans made.

The Moneyfacts survey also found that only a fifth of those polled had payment protection insurance (PPI) on their mortgage, leaving them potentially vulnerable to increased debt and possible repossession if unable to work in the future.

Emma Butler, editor of Moneyfacts, said: “With people borrowing more it is unlikely that any state benefits would cover mortgage repayments if people were unable to work due to illness or redundancy.

“This insurance is not usually compulsory when taking out a mortgage but is something that people should consider seriously.”