Following Treasury Select Committee member Andrew Love, calling for Government action on an increasing protection gap in the mortgage sector, protection provider British Money has begun lobbying for an auto-enrolment solution.
Alexander Burgess, director at British Money, said the added cost to credit providers of an income protection policy is a fifth of what it would cost customers and there's an option to add it onto the mortgage APR at 0.009%.
He added that this was a better alternative to the limited supply of solutions currently available and superior to credit waiver products which have restrictive payment exclusion periods and no unemployment cover.
Burgess is also in discussion with the FCA, which is concerned that Mortgage Market Review guidelines do not require lenders to ask how borrowers will ‘protect' loans and continue repayments if they lose income. Following additional pressure from the Government, the FCA advises the issue ‘will be dealt with appropriately'.