Why you need to focus on mortgage protection in the New Year

5 December 2019
As Brexit drags its heels and political uncertainty continues to cast a shadow over the economy, what can you do to keep your business strong in 2020? Putting protection on the agenda could create new opportunities, while giving your clients more certainty in turbulent times.

If last year is anything to go by, this month each household in the UK will spend at least £800 more than they do every other month of the year. That's 30% more on Christmas festivities.1

But will we all really be feeling as benevolent and frivolous this year?

Temperatures are dropping and we’re all running out of steam – ready for a holiday. Meanwhile a general election is looming, Brexit is lurking around the corner and money worries are rising.

Christmas isn’t cancelled but with all that hanging over us, I suspect more people will be tightening their belt this year.

Brexit’s impact on the housing market

And talking about being prudent, Royal London’s latest Brexit Barometer shows some worrying trends:

  • One in five Brits (19%) – about 10 million people – have put off making a big financial decision because of uncertainty around Brexit.2
  • The housing market has taken a hit with 3.2 million British adults saying they have put off deciding to buy a home because of Brexit.2
  • Thirty six percent of the population expect their finances to get worse (up from 32% nine months ago) and only 6% expect an improvement (down from 8% nine months ago).2

When the future is unclear people behave differently. For the property market, this means would-be sellers are sitting tight. Changing their focus from moving home to financial housekeeping as they seek consistency and stability. This shift was reflected in Rightmove’s recent monthly House Price Index with reports that new sellers in the UK are at a 10 year low for this time of year.3

Your New Year protection opportunity

There’s no getting away from the fact that potentially challenging conditions are ahead. But as the old adage goes – an optimist sees opportunity in every difficulty.  

So how is your business shaping up for the New Year? Are you already thinking about how you’ll generate new client opportunities?

You might have existing clients remortgaging to either lock in their interest rates or remodelling their homes if they’re hesitant about moving. 

With a spotlight on reducing risk, now could be a good time to revisit the protection conversation? 

With a spotlight on reducing risk, now could be a good time to revisit the protection conversation? And now could also be the time to find new prospects.

Research from Canada Life reported that 40% of homeowners haven’t heard from their adviser since taking out their mortgage and almost two thirds have had no contact from their adviser about their protection needs following their initial meeting. Unsurprisingly, half of people surveyed had a change in personal circumstances since taking out their initial loan but almost 40% have yet to update their protection policies.4

With the Association of British Insurers estimating that the protection gap in the UK is £2.6 trillion5, the opportunity to help these people and grow your business is definitely worth thinking about.

We’ve pulled together our most popular tools and ideas to help you get a head start on your mortgage protection conversations in the New Year. These can help you show your clients why it’s crucial they cover all their risks - while making adequate protection affordable for those that are cost-conscious.

Sources
Bank of England, How much do we spend at Christmas, December 2019
2 Research carried out by YouGov on behalf of Royal London, Three million Brits put off buying a new home because of Brexit, October 2019
3 Rightmove, Rightmove House Price Index, October 2019
4  Canada Life, A Third of mortgage holders who used an adviser will elsewhere when their fixed deal ends, November 2019
5 ABI data sourced from canadalife.co.uk, September 2019

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About the author

Matt Doherty

Protection Sales Manager

Matt joined Royal London in September 2018 as a Protection Sales Manager bringing with him extensive market knowledge and sales pedigree. Matt started his career in financial services as a Protection Adviser and has managed successful sales teams both in the intermediary and provider markets. He has a passion for Protection and the positive impact that it has for both advisers and their clients. Outside of work, Matt enjoys sports and family time.

Last updated: 10 Dec 2019

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.