Britain’s growing number of self-employed and contract workers are missing out on the increasingly popular security of mortgage payment protection insurance (MPPI), says Abbey National Home Insurance.

Since 1998 there has been a steady increase in the number of borrowers taking MPPI, with both Datamonitor and the Council of Mortgage Lenders reporting 2.5m MPPI policies in force at the end of 2001, representing 22.5% of all outstanding residential mortgages.

The percentage increase in the take-up of MPPI outstripped the increase in mortgages six-fold between 1998 and 2000 and has gathered pace since. However, despite the fact that self-employed and contract workers now account for more than 10% of the UK workforce, research by Abbey National has indicated that self-employed customers account on average for less than 2.5% of all new MPPI policies taken out.

Abbey National believes that a lack of awareness about the availability of MPPI to self-employed and contract workers means fewer people from these groups are taking the protection.

Lloyd Wilson, Head of Insurance Marketing at Abbey National said:

“We believe the widespread uncertainty about the scope of MPPI means many people who would otherwise use the protection to cover themselves against accident, sickness and the threat of unemployment, don’t do so.”

“This is important because 70% of people who unexpectedly lose their income do not qualify for any assistance from the State with their mortgage.”

“Even the minority that do qualify must wait nine months before they receive any help towards mortgage interest payments, if their mortgage was taken out after 1st October 1995. Similarly anyone with £8,000 in savings will not qualify at all, nor anyone continuing to work more than 24 hours a week”.