The impact of spiralling inflation on premiums will be felt “quite heavily”, a protection expert has warned.
This morning, Office for National Statistics data revealed inflation hit 9% in April – the highest level since 1982.
Impact on premiums
Commenting on the data, Alan Lakey, owner of CIExpert, (pictured) said: “The impact on premiums will be felt quite heavily because whilst the benefit rises by inflation, the premium can rise by as much as inflation +50%.
“Clients may be unaware that premiums could rise at this rate and historic low inflation will have hidden this reality, which is why the value of independent advice can be crucial.”
Pressures on financial and mental wellbeing
Also commenting, Debbie Kennedy, CEO of LifeSearch, warned the firm’s own data indicates financial pressures caused by rising inflation are only increasing.
“Our Health, Wealth & Happiness 2022 Index found that seven in 10 (72%) of all Brits expect to be worse-off financially this year as inflation soars – now hitting 9% – anticipating to be on average, rising to £3,252 for women and £3,588 among those aged 35-44. London is the region where people expect to be hit the hardest at – £3,859 pa worse off.
“Overall, just 8% of respondents said they don’t think they’ll be worse off financially as a result of inflation so it’s hardly surprising that Brits are concerned about their finances in the current climate as many are having to face the unthinkable choice of food on the table over heating their home.”
But Kennedy warned the rising cost of living is also having a detrimental effect on consumer mental health.
“When polled in April 2022, three-quarters (74%) of adults said their mental health has been negatively impacted in the last two years and of these, the “rising cost of living” (28%), closely followed by “Covid restrictions” (27%), were the top causes,” Kennedy continued.
“With so much uncertainty still, it has never been more important for consumers to protect themselves and their families – the right protection can give peace of mind from any future financial shocks that may impact their income such as sickness, injury or death.”