It is “essential” that borrowers take out some form of financial protection, which could help them with debt management if they were made redundant, it has been stated.
Lucy Widenka, a personal finance campaigner for consumer body Which?, urged people to seek advice on how to protect themselves in the event of unemployment.
It comes after the watchdog claimed that millions of single premium payment protection insurance (PPI) policies have been sold to loans customers who are not eligible for cover.
Ms Widenka said that taking out income protection instead of PPI will not just cover repayments on one loan, but will also help borrowers cope with mortgages, credit cards and “getting food on the table”.
Which? has noted that people such as the self-employed, over-65s and those with medical conditions may not be able to claim on their PPI policies as they are classed as ‘significant exclusions’.
By Jamie Price