Economists said that payment protection insurance refunds actually help the economy as local markets see most activity in the last few months. The refunds were a windfall and economists see it as having an effect better than quantitative easing.
The Office of National Statistics (ONS) also mentioned a 13.4% increase in the number of car owners in the United Kingdom. They said that 27,000 more car registrations were noted in the previous six months of 2013, supporting their theory that PPI had held back consumer spending.
Many consumers were spending their refunds using the money as downpayment for new vehicles, furniture and appliances. Some used the money to repair utility lines and other home improvement projects. Some people re-invested their money in the market for circulation and growth.
PPI is an insurance product that costs around £3000-3500 and is supposed to protect your repayments for your financing if you get sick or become unemployed. However, bank representatives even mis sold the insurance to ineligible consumers. If you think you were mis sold PPI, you could call on a claims management company to ensure you get your complete refunds.
However, the total PPI compensation package had now reached £17 billion in total as Lloyds, RBS and HSBC added further to their PPI redress packages. Experts estimate that the refund bill could reach more than £20 billion by the end of the year.