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UK economy boosted by PPI refunds

UK economy boosted by PPI refunds

Category: Money

Updated: 07/08/2012
First Published: 07/08/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The alleged mis-selling of payment protection insurance (PPI) has resulted in banks dishing out nearly £9 billion so far to affected customers over recent months.

It appears that many people are taking full advantage of spending their payouts, however, by booking expensive holidays and making home improvements, providing the UK economy with a much needed boost.

It is thought total spending as a result of successful PPI claims could outweigh Government schemes to increase economic growth.

Simon Kirby, senior researcher at the National Institute for Economic and Social Research (NIESR), said: "A 'worst case scenario' involving total pay-outs of £15 billion, could increase UK Gross Domestic Product (GDP) by 0.7%."

Lloyds Banking Group recently announced it had made provisions of over £4 billion to cover PPI claims, whilst RBS, Barclays and HSBC have also set aside funds running into billions of pounds.

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