The Financial Services Authority (FSA) is set to introduce comparative tables for payment protection insurance (PPI) from March next year to help people avoid accruing more debt than necessary.
PPI has been a contentious issue in recent months, with the industry regulator undertaking a review of lenders’ selling practices to make sure they are fair.
It was suggested that some lenders were selling the insurance without making clear that it was voluntary, meaning that consumers were building more mortgage, loan and credit card debt than they might wish to.
PPI is sold for a number of loan products and safeguards borrowers from having to clear debt when they fall ill or lose a job – however, prices vary and there is no obligation to take insurance from the lender.
“Our research has found that many people are still taking PPI straight from the lender,” says Robin Gordon-Walker, a spokesperson at the FSA told the Guardian.
“They don’t want to go to a broker as they think it is time consuming and there is little opportunity to shop around – in fact there is a big gap in the market if they try to do so.”
The new tables from the FSA will allow those taking out an unsecured loan or mortgage to establish where the best deal is likely to be found.