A new survey has found that somewhere in the region of half of the adult population of the UK has no form of life insurance, or other policies which would provide an income, or support for their families in the event of their death or serious illness.

The research, which was carried out on behalf of Friends Provident, found that around 24 million individuals had no form of protection policy in place and the vast majority of those who did have cover, had a significant shortfall on the amount of cover they actually needed.

Many people take out some type of insurance for their home owner loan, or a payment protection plan for their other debts, such as their personal loans and credit cards, but in many cases this cover is inadequate or insufficient.

Due to the increased cost of borrowing, a growing number of people do not even have protection cover for their outstanding loans and other debts, claiming that they can not afford the premiums. The question should be, can I afford not to have protection cover on my loans?

Of those people who had taken out cover, whether this was for loan protection of family cover, 53 per cent only knew that they had cover, but had no idea about how much benefit they would actually receive or if this was a lump sum or income cover and how long would this last for.

Ed Stuart-Brown at Friends Provident said “It’s a sad fact of life that the unthinkable can and does happen and the last thing you would want is to leave yourself or your family in dire financial straits. I would also urge those who do have cover to dig out their policies and review their level of cover to ensure they have made adequate provisions should the unexpected happen. Unfortunately it’s too late to do anything about it once illness, accident or death occurs. If you are fit and well now is the time to act, the cost for most people is a fraction of the potential benefits they could receive and it’s a simple matter to review your needs with your adviser.”

The home owner loans and mortgage market has always been a difficult and confusing place to be for someone looking for a new loan by themselves, but for first time buyers who have never been through the house buying process before, or applied for a home owner loan, the prospect of going it alone can be even more daunting.

It is hardly surprising then, that first time buyers made up the highest proportion of individuals who sought professional advice during last year, when looking for a new home owner loan or mortgage.

According to the latest figures from Unbiased.co.uk, which helps people get in touch with an independent financial adviser, over the course of the whole of last year in excess of 70,000 potential borrowers took advice before choosing their home owner loan.

Of these enquiries, somewhere in the region of 40 per cent of all those seeking advice on a home owner loan, related to enquiries from first time buyers.

Remortgage loans were the second most popular request, at 32 per cent, followed by residential loans at 21 per cent, buy to let loans at 12 per cent and bad credit loans at 7 per cent.

Unbiased.co.uk say that they saw a particularly sharp increase in enquiries for loan advice in the first nine months of last year, due to the lack of available mortgage and home owner loan deals in the market place.

Karen Barrett of Unbiased.co.uk said “It is encouraging to see that when there is turbulence in the housing market, consumers are seeking advice from the experts. However, it is essential consumers continue to seek advice regardless of the state of the property market, to ensure they are making the best decisions for their individual circumstances.”

There has been a sharp increase in fraudulent home owner loan, mortgage and personal loan cases in the UK over the course of the last year, compared with the previous year, according to a new report published by CIFAS.

CIFAS, the UK’s fraud prevention service, has just released a 48 page report which has shown that the number of fraudulent loan applications has increased by around 10 per cent in the last twelve months, above the figure for 2008.

According to the figures, there has been a steady reduction in the number of fraud cases relating to loan applications over the past few years, largely due to the declining housing and hoe owner loan market, but as we start to see some signs of recovery and improvement in this sector, so the incidence of fraud cases is also increasing.

Application fraud, where someone knowingly includes false information on their application in order to obtain a loan, such as declaring an inflated income level or not mentioning other existing loans, has actually decreased by around 25 per cent over the past two years .

However, there has been a significant increase in identity fraud, where someone has used another person’s details, or completely fictitious details, in order to try and apply for a new loan and the CIFAS report says that this area of fraud has increased by around 32 per cent in the last twelve months.

Peter Hurst of CIFAS commented on the reports findings, he said “At a time when every responsible member of society feels the strain of current economic conditions, the findings presented in Fraudscape not only reveal the true nature of the frauds identified, but also reveal many of the problems and challenges ahead. This, however, is only the tip of the iceberg. Over and above the frauds recorded by CIFAS members, there is an additional and unquantifiable volume of  fraud that, due to tighter lending criteria, never got as far as the fraud department.”

January this year saw the lowest number of home owner loan and mortgage applications since 2002, although most experts believe that this is largely due to factors such as, the usual seasonal decline in loans, particularly bad weather and the rush by many home buyers to beat the end of the stamp duty holiday at the end of last year.

Despite this drop in loan applications, there were more home owner loan products on the market by the end of January this year, than at any tome in the previous twelve months, according to the latest figures from Moneyfacts.co.uk.

Although there were only 35,000 new home owner loan applications made throughout the month of January, the total number of available loan products from lenders increased to 2,019 and although this is still only a small fraction of the number of loan deals available a few years ago, there is now a wider choice for potential borrowers than they have had for the past twelve months.

What is even better news, particularly for first time buyers, is that many of the new deals being introduced by lenders are starting to relax their lending criteria slightly and offer higher loan to values ratios on their products. There are now a much higher proportion of loan deals which offer up to 90 per cent loan to value.

Darren Cook at Moneyfacts.co.uk said “There is an indication that competition within the mortgage market is getting stronger and more products are being made available to customers with small deposits, but these are still priced at a premium.”

“With product numbers on the increase, the question of quantity over quality arises. But this mortgage market dictates and history shows us that with quantity comes quality and open competition on interest rates.” 

This may seem like quite a strange statement to be making, but new research form Unbiased.co.uk has found that the average person living in the UK spends the first 50 days worth of salary on repaying their personal loans and other debts.

The consumer website, which helps to put individuals in touch with independent advisers for home owner loans and other financial matters, has declared that the 20th of February this year should be known as “Debt freedom day.”

Debt freedom day has been calculated as the point in the year when an average person with loans would have cleared all their debt commitment for the year, if they had used every penny of their salary to repay their loans from the beginning of the year. To put it another way, 13.7 per cent of an individual’s earnings are going towards repaying personal loans and other debts.

Despite the fact that many banks, building societies and other loan companies have been particularly reluctant to offer loans to anyone over the course of the last couple of years and also that many people in the UK are concentrating on repaying as much of their personal debt on loans and credit cards as they possibly can, the average debt level amongst individuals in the UK is still increasing, as individuals continue to take out new personal loans and use their credit cards to supplement their salaries.

The Consumer Credit Counselling Service (CCCS) has commented that this news shows just why individuals should not become complacent about their loans and other debts and should manage their debt repayment more actively.

Karen Barrett of Unbiased.co.uk commented on the figures, she said “Debts can quickly mount up to a considerable sum and this rate demonstrates that debt is something that we need to take control of and actively manage.”