Bit of doom and gloom i’m afraid but first some good news, the latest figures from the Office for National Statistics (ONS) show a leveling out of unemployment. Right, on with the bad news – despite the unemployment plateau, many people are still worried about how they will pay their mortgage if they lost their job.

Needless to say, defaulting on any debt repayments can have serious consequences but with the bad rep insurance has due to all the PPI claims fewer people than ever are covering their back. What makes this financial timebomb even more of a worry is the fact that at the end of last year, the Council of Mortgage Lenders predicts over 53,000 repossessions in 2010.

Five years ago, you, me, the world and his toothpick could get a credit card and often it would have an attractive cash reward scheme attached. Thems were the glory days, when credit was readily available and terms were easy to meet, oh how things are different now.

Back in 2005, a quarter of all credit cards included a cash back scheme, now just 1 in 20 cards come with such a benefit but what has caused this change in the market place? The main reason for this disappearing act is the reduced revenue banks are receiving, in particular from Payment Proteciton Insurance. Add to this the countless mis sold PPI claims that they’ve had to pay out for and many providers are tightening their purse strings to make up for the loss of income.

We thought we’d dig a little deeper on the stats uncovered by the Association of British Insurers (ABI) survey that we blogged on earlier in the week. The survey looked into protection insurance in the fourth quarter 2009 and the result showed more people are worrying about losing their jobs and reckon the economy will get worse.

Although you could have come to that conclusion yourself without the need for research, it is interesting to know that almost a third, 31%, of people surveyed thing the downturn will get worse. This figure is up 9% on the previous quarter survey. The survey also revealed that payment protection insurance was no longer as popular due to cost cutting steps, with 13% of participants saying they’ve cancelled cover in the last 3 months.

You’d think with there being a recession on and all that companies and organisations would be looking for any possible way to save money? Think again. The Association of British Insurers (ABI) recently conducted a survey into, amoungst other things, the popularity of Payment Protection Insurance (PPI), we could’ve saved them the bother.

Needless to say, all the recent PPI claims and mis-sold cover has knocked the PPI industry a little and the survey revealed overall trust in PPI is decreasing. The interesting point that ABI did stumble upon is that job security worries are rising inline with the mis-trust, meaning people don’t want PPI when they need it the most. Time for someone to come in and shake up the industry image, anyone? There must be someone ready to take PPI under their wing!

I’m not going to make a grand statement about this or get on my soap box – anyone who’s considered making a claim on Payment Protection Insurance (PPI), or looked into getting PPI compensation, will understand how useless the cover can be when mis-sold. And as a brilliant illustration of this the guys at lovemoney.com have put together a great article – ‘the top 10 insurance types that pay out’. No prises for guessing what position PPI comes in at. Read on…

As you may have heard recently, Tesco are making further inroads into the retail banking sector. They already have over £4 billion in savings accounts and now they’ve changed their financial arm’s name to ‘Tesco Bank’ and built a new call centre, they plan to go full on into current accounts and the rest.

But they won’t have it their own way, not if Virgin have anything to do with it because they’re returning to the sector through the help of two of the biggest and smallest banking outfits in the world. Virgin plan to buy a tiny Yeovil-based bank called Church House Trust as the building block for a new branded banking institution. And despite the bad image and countless PPI compensation cases, they also plan to start selling Payment Protection Insurance with the help of the Bank of America, meaning that UK customers in need of cover have a new, better trusted and bearded company to consider.

The Competition Commission (CC) is to meet with banks early this year to discuss their proposal to ban the sale of Payment Protection Insurance (PPI) at the point of a borrowing being agreed. The proposal was put forward in January last year but Barclays appealed it and won, resulting in this new consultation.

The consultation will discuss the following points:

- Date when the new measures should start
- How the recession has affected PPI
- If the law change will affect the popularity of PPI
- Side affects of the 7-day ban

The main concern of the CC is that they believe consumers do not realise they have choice and can choose cover from another provider if they wish. In the past consumers have gone with their lenders offering only to later claim PPI compensation as the cover proved useless due to poor selling and advice. Also, in many cases cover from independent providers is cheaper than that offered by the credit provider and so represesnts better value for money.