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Inflation can be controlled in the broader economy – at least for the moment – but not when it comes to essential insurance.
A few days ago, market research company Consumer Intelligence reported that home insurance costs are skyrocketing. Worryingly, he said there was little evidence to suggest current price increases would ease sooner rather than later.
Over the past year, Consumer Intelligence said the average quoted price for home insurance rose nearly 42 percent, the largest increase since it began collecting pricing data 10 years ago.
The 10.3 percent increase over the past three months was also the largest quarterly increase since records began.
Homeowners filing recent claims have faced the largest premium increases: an average of 50 percent for both construction and water-related claims.
Worrying: Over the past year, Consumer Intelligence said the average quoted price for home insurance increased nearly 42 percent.
Motorists are facing a similar premium storm, with insurance costs currently rising by an average of 43 percent, according to comparison website Confused.com.
These increases are indicative of what my email has been telling me for the past 18 months, although many readers have been quoted much higher premium increases at renewal time.
Clive Sledger, from Richmond in North Yorkshire, is among them.
Last year his car insurer wanted to increase the premium on his ten-year-old Kia Ceed by £350 to £585. Shopping around, he managed to find new cover for £440 on Confused.com, reducing the 149 per cent increase to a more manageable 87 per cent.
Now Saga has sought to increase its annual home insurance premium from £155 to £353, an increase of 127 per cent.
‘What planet are these people on?’ he asked me last week. Not this one, Clive.
Fortunately, Clive, an 81-year-old retired farmer, turned to Confused.com again and got a much more favorable deal.
The worrying thing is that if this tide of premium increases does not stop soon, we will see more homeowners take the risk and leave their property and possessions uninsured. It’s what’s happening in the United States right now.
Car owners are required by law to have insurance, but more and more are driving without coverage, risking a hefty fine, points on their license and disqualification.
Others, especially the elderly, simply give up and sell their engines.
In its manifesto, the Labor Party promises to “tackle” the rising cost of car insurance (not a word about home insurance) without saying how. We look forward to your solutions. They cannot be as mediocre as the regulator’s failed attempt to bring order to the two markets. Surely?
If you’ve stopped insuring your home and belongings, or stopped driving due to rising insurance costs, I’d love to hear from you.
jeff.prestridge@mailonsunday.co.uk
Many promises, few fiscal guarantees
Labour’s manifesto was long on pages (more than 130), photographs of Sir Keir Starmer (too many) and promises (most, we were told, guaranteed a boost to the economy).
However, there was little about what Sir Keir and his financial lieutenant Rachel Reeves have in mind for a panoply of taxes they could choose to increase if the economic miracle they promise fails to materialize (or, indeed, if political dogma simply succeeds). prevail). best of them.
Taxes that undermine wealth creation appear more vulnerable. If I were a betting man, I’d bet a fiver on increases in capital gains tax rates being introduced before 2029 arrives. And I’d bet another fiver on a further tax cut on pension contributions being scrapped. . I hope to be wrong.
It’s not just the election you should vote in…
Well paid: Nationwide boss Debbie Crosbie
The General Election is not the only vote that will take place next month. Some more than 16 million members (savers and borrowers) of Nationwide Building Society will also be able to vote at (or before) the mutual’s annual general meeting on 17 July.
Although Nationwide’s vote is apparently as close a matter as the General Election result, it is important for customers to have their say, not least because the society will make a £1 donation to charities for every vote cast (subject to a limit of £500,000).
As with all building societies, Nationwide is owned by its members and should not miss the opportunity to vote. Most will vote online, a fairly simple process. But don’t go for the “fast” vote option, which means you’ll end up endorsing all the resolutions presented at the AGM. Instead, take the time to read the corporation’s 2024 summary financial statement before voting and review the brief biographies of the directors (11 in total) seeking re-election to the board. In particular, I urge members to read the section of the statement on the remuneration of company directors.
In the year to April 2024, CEO Debbie Crosbie received remuneration of £2,410,000. Although it was less than the £3,455,000 she earned in the previous financial year, the 2023 total was inflated by £1,705,000 – a one-off payment to compensate her for the loss of variable pay awards she would have received had she decided not to take charge. take the reins of Nationwide and remain as head of TSB.
Removing this bonus from the equation, Crosbie received a comparable overall pay increase of just under 38 percent. Some members will regard this increase as mind-boggling, both in absolute and percentage terms (profit growth in the economy is currently running at around 6 percent).
Others will see it as fair reward for running a successful business, one committed to maintaining a strong presence on the high street.
Whatever your opinion as a Nationwide customer, voice it by voting.
Calls to ensure no home is left out
Improving the country’s financial health is not just about governments, current or future, ensuring that public finances are in good order.
Equally important is building a society where everyone has access to the services and tools necessary to take care of their personal finances without being excluded or discriminated against.
It is a vision that the Financial Inclusion Commission (FIC) has put at the top of its agenda. Tomorrow it will publish preliminary results of research confirming that many households are being financially excluded, either as a result of not being part of the new digital financial world or an inability to access cheap credit or physical cash.
He will also call on both Labor and the Conservatives to prioritize national financial inclusion if they win the general election.
The independent commission has influence. It is made up of experts drawn from the financial services industry, charities and the regulatory world. They include Sian Williams (chief executive of Switchback, a charity that helps former prisoners successfully integrate into society) and John Howells, chief executive of national ATM network Link. The FIC says any national financial inclusion strategy must be based on five key themes.
These range from easy access to essential financial services, such as bank accounts, physical cash and face-to-face advice, to affordable and well-regulated credit.
These are worthy goals that I support and have written about many times. Let’s hope the Labor Party accepts them when their revolution begins (barring a miracle) on July 5.
Of course, there is no idiot about these issues in their manifesto.
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