Abacus Daily Debt News

PPI decision welcomed

Announcements from several high-street lenders that they are to cease offering single premium payment protection insurance (PPI) have been welcomed by industry representatives.

The decision was made by Barclays, Alliance & Leicester, The Co-Operative Bank, Halifax, Bank of Scotland, Lloyds TSB, NatWest and the Royal Bank of Scotland.

British Insurance Brokers’ Association spokesperson Peter Staddon said the move will help providers realise that single premium PPI - often sold alongside loans - is "bad value".

"We believe that single premium PPI policies should be outlawed and urge the rest of the industry to follow suit," he remarked.

He added that disapproval over the policies expressed by the Financial Services Authority was justified, as single premium cover can result in borrowers facing higher costs.

Citizens Advice also welcomed the banks’ decision, stating that the PPI products can be "very expensive" and can "add substantially to the cost of a loan".