Need some extra money this Christmas? Then shop around for PPI.

Consumers are being urged to turn their payment protection insurance (PPI) premiums into presents by protection insurance expert and consumer champion Simon Burgess.

He says that consumers are paying up to £605* more than they have to every year on loan protection cover and up to £225* per year extra on mortgage cover.

Simon, who is MD of the ethical protection insurance provider BritishInsurance.com continues: “Half of the average credit card spend on Christmas shopping this year is needlessly going on payment protection insurance … The money wasted on inflated premiums could have gone towards buying this year’s gifts and groceries or contributed towards a Christmas holiday”.

He certainly has a point. With the Office of Fair Trading (OFT), the Financial Services Authority (FSA), and Citizens Advice Bureau all slating High Street banks and lenders for their over priced premiums and ‘dodgy’ sales practices, it makes sense to shop around.

If you do actually shop around, you’ll see that the difference in premiums is quite staggering. According to the research*, the Royal Bank of Scotland was nearly seven times more expensive than BritishInsurance.com for loan cover**. For mortgage payment protection insurance, the Cheltenham & Gloucester was around double**.

The difference in premiums is nothing to do with the quality of the policy either. Just because a policy is more expensive, it doesn’t mean it is of better quality than a cheaper PPI product. It just means that there is more money to go in to the lender’s pockets as commissions.

In fact, many of the ‘cheaper’ policies actually offer better policy benefits!

Many people do not realise that they do not have to buy the credit providers’ own protection insurance product - despite the much publicised ‘hard-sell’ techniques that are employed by their sales staff - and that they can take out a standalone policy.

So, if you have a PPI policy, why not switch to a cheaper one? It doesn’t only mean that you’ll have a less expensive Christmas, but you’ll be saving money on premiums from now on!

* Research carried out by BritishInsurance.com 27 November 2006
** Based on a £10,000 loan, paid back over five years, with an average monthly repayment of £233, plus a £100,000 25-year repayment mortgage with £500 monthly repayments