It’s official: the Bank of England has upped interest rates in the UK from 1.25% to 1.75%, as it seeks to restrict the recent escalation of prices amid an intensifying cost-of-living crisis.
The Bank’s Monetary Policy Committee voted in favour of the move by a majority of eight to one, and it is fair to say that very few people will probably be surprised. The Bank said it had made the decision in order to help bring inflation back to its 2% target, adding that with inflation already exceeding 9%, it anticipated a further rise in inflation by the end of 2022, to around 13%.
The Bank said the downturn was largely due to staggering increases in gas prices after Russia’s invasion of Ukraine; indeed, it has been predicted that the typical yearly energy bill could reach £3,500 in October.
What impact can you expect if you have a mortgage?
Needless to say, for those who are presently paying off a mortgage, or even considering taking one out, these are extremely uncertain times.
Nonetheless, there has already been much analysis of the move, which experts have said will “pile more misery” on the almost two million people with variable rate mortgages, at a time when they are already having to contend with other steep increases in costs.
The CEO of one financial institution quoted by Yahoo! Finance said that repayments for the average home were set to go up by £52 as a consequence of the Bank of England’s decision, with an increase of £196 per month having been seen since last autumn.
As for if you don’t yet have a mortgage but are considering one, it is fair to say that new deals could become more expensive. In short, this is not a time when you should be trying to go without protection, if you can possibly afford it.
Give us a call to learn more about your options for mortgage protection insurance
All of this brings us neatly onto the subject of mortgage protection insurance, and what it could do to give you a bit more peace of mind during these challenging and concerning times.
Mortgage protection cover can be essentially considered a form of income protection insurance. The idea behind it is that if you suffer from a long-term sickness or disability that prevents you from working, it can provide monthly tax-free payments to cover your mortgage costs, so that you don’t lose your home. You might also use some of the money to pay for other household expenses, such as energy and food costs, in the event that you make a successful claim on the policy.
However, it is also true that no given person’s circumstances are exactly the same as the next person’s, and that you will have a lot of decisions to make if mortgage protection insurance seems to be a relevant product to you.
Maybe you would appreciate advice, for example, on how you can reduce the cost of mortgage protection cover, or how long you would like the payout period to be on your policy? Or are there other forms of protection insurance on the market that could actually represent a better match to your circumstances and requirements?
These are all matters that you can begin to explore with one of our UK advisers, when you give our advice and quotation line a call today, on 0800 316 6917. It’s free to call, and you will be under no obligation to accept any particular quote we present to you. So why not get in touch now, so that we can help you find the perfectly suited policy for you and your household?