We get asked many questions regarding PPI claims, one of which is about interest. We explain all about this topic, below.
Now is the time to make your PPI claims. With less than a year until the PPI deadline, the countdown is on! You probably have a lot of questions about making a claim and we provide answers to many of these on the Canary Claims website.
The banks have paid over £32 billion to consumers for PPI claims. But, there are still thousands more consumers who haven’t yet made a claim but are entitled to a refund. Whether you had a mortgage, loan or credit card, it’s possible that you were mis-sold PPI. Many consumers had the insurance automatically added to their financial product without knowledge or consent. A total of 64 million PPI policies were sold in the UK, meaning some people had more than one.
We get asked by many customers if a PPI claim includes interest. Below, we explain about the interest on your PPI claim and what it includes.
Do PPI Claims Include Interest?
The short answer is yes, PPI claims do include interest. There are two kinds of interest included in a PPI claim refund.
Statutory interest on PPI claims
This type of interest acts as compensation for being deprived of money. The current rate of statutory interest, as set by the government, is 8%.
Interest paid on the PPI policy
It’s likely that, if you paid PPI over a few months or years, you would have paid interest on it. This interest will be included in your PPI refund.
It’s also important to note that you have to pay tax on your PPI claims. Read our guide about it here.
How is Interest on PPI Claims Calculated?
As the UK statutory interest rate is 8%, the bank will calculate 8% of your PPI policy — including any interest you paid on it at the time. However, it’s important to note that the interest rate does change and, before April 1993, statutory interest was 15%. This means that any consumers paying on their PPI policies before this date will have paid a higher rate of statutory interest and will receive a higher payout.
Although a claim should take only eight weeks at the bank, complex cases where PPI was paid both before and after April 1993 may require longer time at the bank to be calculated.
As for the interest you paid on PPI policy, the bank will review the amount of interest you paid and will refund you the money.
When you receive the outcome of your PPI claim, the bank will break down your refund and explain how much the refund is and how much is paid in interest.
If you are curious to know how much you could be due from a PPI claim, use our free PPI claims calculator. It can provide an estimate as to how much you could be refunded from your bank. The calculations for PPI claims can be complex, so it will offer an approximate figure.
Now that you know that PPI claims include interest, it’s time to start your claim. Remember, the PPI deadline is set for 29th August 2019. The average claim is £1,700 — yet some people have received much more than this amount. Don’t leave it too late to find out if you could be owed money.
Don’t delay — start your PPI claim today. Canary Claims offer an incredibly low fee of only 15% + VAT on successful claims. Contact us today!