Wed. Sep 27th, 2023
    Bank of England Awaits Inflation Figures as Insurance Premiums Skyrocket for Elderly

    The Bank of England is eagerly anticipating the release of inflation figures for August, which will determine the effectiveness of their efforts to curb inflation. All indications suggest that inflation is likely to surpass July’s rate of 6.8 percent, necessitating another interest rate increase from the Bank’s Monetary Policy Committee. This would mark the 15th rate hike since December 2021, with the new rate set at 5.5 percent.

    While inflation continues to be a challenge for the overall economy, one area where it remains particularly untamed is in the home and motor insurance markets. Many insurers are demanding exorbitant premium increases for policyholders when their cover comes up for renewal, and the elderly are often the hardest hit.

    Reports indicate that some older drivers have received renewal notices with premium increases that are off the scale. For example, an 80-year-old retired technical services manager saw his car insurance renewal premium from Saga skyrocket from under £313 to £1,150. Another 83-year-old retired bank manager was told that his car insurance policy would not be renewed, and he had to find cover elsewhere at a cost of £3,500.

    The situation is similar in the home insurance market, where an 81-year-old homeowner saw his premium rise from £298 to £1,239. Insurers often consider age as a factor when assessing risk and pricing cover, but the magnitude of the premium increases for elderly customers has been deemed unfair and unjust.

    In other news, traditional high street banking is slowly fading away as more branches close. Over 1,100 bank branches have shut down since last year, with many more expected to follow. This shift towards digital banking puts pressure on elderly customers who may not be as accustomed to using mobile banking services. Moreover, stealth taxes continue to burden savers, with the reduction of the annual tax-free capital gains allowance from £12,300 to £6,000, and further to £3,000 from next April.

    Overall, the financial landscape is evolving rapidly, posing challenges for both savers and elderly individuals who face skyrocketing insurance premiums. The Bank of England’s battle against inflation is set to continue, and the future of traditional banking is uncertain.