10 May 2016
Since the PPI compensation started to be paid out in 2011, 12 million customers have claimed their money back. According to research and various surveys, consumers have more or less spent this windfall immediately.
Bearing in mind that not all PPI compensation claims are in their thousands, many customers have taken to the shops to spend their unexpected but welcome windfall of cash. But what have we been spending this cash on? And do you have a claim for mis-sold payment protection insurance (PPI)?
The figures seem to keep going up and up. With fines and administration costs running into billions of pounds, this has meant the PPI compensation pots of banks are simply gargantuan in size.
At the start of 2016, Lloyds Banking Group, arguably the bank taking the biggest hit because it is the largest banking group with a high proportion of customers, added yet another £4 billion to its PPI compensation fund.
According to the Financial Conduct Authority, the average collective pay out each year in PPI compensation claims from across the bank totals £4.5 billion. With 12 million customer claiming their money back, this puts the average claim at £1,875.
In 2012, the PPI compensation bill peaked at £6.3 billion. As a result, think tanks and financial groups such as the National Institute of Economic and Social Research suggested that PPI refunds could push the GDP growth by 0.1 to 0.2%. This may not seem like much, but when it comes to the economy and growth, the smallest fraction of change has a big impact.
While the banks' profits and reputations suffer as a result of the PPI mis-selling scandal, the customer is reaping the rewards.
A survey in 2014 still offers the biggest insight into what customers spent or are spending their PPI compensation money on. Not only did the survey show us what people are spending it on, it showed that once the money was paid back to the consumer, they spent it straight away.
It also showed that a small percentage of people put all or any of the payment in a savings fund or vehicle, with the majority of people opting for a new car or a holiday.
But there were some surprises too with a large proportion of customers buying clothes, shoes and groceries. Many economists put this down to a sign of the recent recession still biting the household budget.
Do you have a claim for PPI compensation? Find out today by contacting Scottish PPI Claims.