The Intermediary – August 2025 - Flipbook - Page 68
P RO T E C T I O N
Opinion
Mortgage
protection in
uncertain times
T
he UK housing market
is facing a perfect storm
of economic pressures.
With growing concerns
around job security
and household
savings dwindling, it’s a crucial
time to consider how mortgage
protection can offer peace of mind and
financial stability.
According to the Chartered Institute
of Personnel and Development (CIPD),
employer redundancy intentions
have soared to their highest level in 10
years. This alarming trend comes at
a time when British households are
particularly ill-equipped to weather
financial storms.
Additionally, recent analysis by
market research firm Finder reveals
a stark picture of financial fragility:
almost two-fihs of UK adults (39%)
have £1,000 or less in savings, with
one quarter (23%) surviving on £200
or less, and a troubling one in six (16%)
having no savings whatsoever.
Meanwhile, inflation unexpectedly
ticked upward by 0.2% to 3.6% in
mid-July, complicating the Bank
of England’s plans to cut interest
rates throughout the year, amd
borrowing costs are likely to remain
elevated for longer than many
homeowners anticipated.
Adding another layer of complexity,
the Chancellor’s recent decision to
cut red tape for mortgages has opened
the door for more first-time buyers to
enter the market. Those earning just
£30,000 annually can now apply for
certain mortgages, which is estimated
to support an additional 10,000 firsttime buyers each year.
While geing more younger people
on the housing ladder is important,
it means a greater number of
homeowners are entering the market
with substantial mortgages at rates
that could prove unfavourable if
economic headwinds continue to last.
To contextualise this, as of July
2025, Finder estimates that the average
monthly mortgage repayment on a UK
house stands at £1,428. For households
with minimal savings, this means
financial strain could arrive within
just a few weeks of losing income.
Filling the protection gap
Regulatory caution in recent years has
led to few providers actively offering
comprehensive unemployment
protection to consumers. But with
household pressures mounting, the
industry is beginning to respond.
For our part, Paymentshield
announced in June a product offering
that directly addresses the growing
vulnerability of UK homeowners.
We reintroduced unemployment
cover to our mortgage protection
policy, which now sits alongside
Asked and answered: Brokers want products that fill the gaps for clients in uncertain times
66
The Intermediary | August 2025
LOUISE PENGELLY
is distribution director
at Paymentshield
traditional accident and sickness
coverage. The product allows
customers to cover mortgage
payments and associated insurance
premiums for up to 24 months if
they’re unable to work due to accident,
sickness, unemployment, or if they
need to become a carer.
It has also been specifically designed
to ensure that customers can increase
their monthly benefit by up to an
additional 33%, so they can cover
other commitments like utility bills or
credit card payments. The maximum
benefit reaches £3,000 or 75% of
gross income per month, providing
meaningful protection where it’s
needed most.
The 2025 Paymentshield Adviser
Survey revealed significant market
demand for this line of product
development. When 485 advisers were
asked what new product they’d most
like to see offered, 53% responded:
accident, sickness and unemployment
cover for new customers.
To make it even simpler to offer this
in-demand product, we’ve updated
and optimised the quote journey so
advisers can generate an accurate
quote in under one minute, meaning
peace of mind is never far away.
Given current market conditions,
comprehensive protection is more
important than ever, and ensuring the
financial security of your home, and
the people within it, is paramount.
For an industry defined by risk
management, the current economic
environment presents both challenge
and opportunity.
Advisers able to offer genuine advice
and support when it maers the most
will forge lifelong client relationships
built on trust. No maer which
direction the economy heads, we’re
here to support. ●
