With inflation at a 30 year high and living costs soaring, how can brokers help their customers weather this financial storm?

The situation faced

UK inflation hit 5.5 percent in January - the highest since March 1992 and doesn’t look likely to reduce any time soon. With wages failing to rise at the same pace, the money in our pockets isn’t stretching as far. Warnings from the Bank of England indicate that inflation could rise to as high as 7% later this year.

Key to this rise in inflation is the much reported hike in global energy prices pushing up the costs of running a business, which is inevitably passed onto the customer, raising the price of what we buy. The effects of Brexit and Covid-19 are also in the mix making certain job vacancies harder to fill, just one further example of why costs are rising. Other areas of concern are increasing rail fares, due to go up by 3.8% in England from March; the impending increase in broadband costs and how much we’ll have to pay in National Insurance contributions to help offset social care costs from April.

These are basic, everyday costs – businesses and consumers are being hit hard from multiple angles.

Managing the cost of living – brokers can help

Making good purchasing decisions will be imperative in these challenging times. With a routine expense like insurance, brokers continue to play an important role facilitating the right cover, at the right price and the right levels, providing the vital protection their customers need.

The way customers pay for cover will also be key to weathering this inflationary storm. Effective use of credit like premium finance is a strong option. Customers don’t have to meet the cost of cover in one lump sum, they can pay through convenient monthly payments instead. Spreading the cost of insurance premiums in this way can help maintain a strong cash flow allowing businesses and consumers to use their cash reserves where they are needed most.

An additional income for brokers

Brokers are not exempt from the same pressures of escalating inflation either. Premium finance, in addition to helping improve customer options and bring in more business creates commission opportunities for brokers too, providing a welcome, additional income stream. Are you maximising this opportunity?

If you’d like to explore the wider possibilities premium finance can give you and your customers, our team will be pleased to outline Premium Credit’s award winning payment solutions.