In October 1995, restrictions were introduced to the State safety net provisions for mortgagors who lose all income through accident, sickness and unemployment. Recent research for the Joseph Rowntree Foundation has been carried out, into whether private insurance has bridged the gap left by the withdrawal of State support and looked at the consequences of the changing relationship between State and private safety net provisions.
Borrowers have little knowledge or understanding of the nature of the changes.
Few new private insurance products have been developed to mirror the cuts to State provision. At most, only 21 per cent of borrowers have private insurance. Three-quarters of people at greatest risk are not insured and could wait up to nine months for help with mortgage interest costs. This group make up a quarter of borrowers. There was no evidence that those at greatest risk were more likely to insure.