JEFF PRESTRIDGE: Why are our house insurance costs going through the roof?

Inflation may be tamed in the wider economy – for the time being at least – but not as far as essential insurance is concerned.

A few days ago, market research company Consumer Intelligence reported that home insurance costs are going through the roof. Worryingly, it said there was scant evidence to suggest the current price hikes would be abating sooner rather than later.

Over the past year, Consumer Intelligence said the average quoted price of home insurance has risen by nearly 42 per cent – the highest increase since it started collecting price data ten years ago.

The 10.3 per cent increase in the past three months was similarly the biggest quarterly increase since its records began.

Homeowners who made recent claims have faced the biggest premium increases – an average of 50 per cent in the case of both building and water-related claims.

Worrying: Over the past year, Consumer Intelligence said the average quoted price of home insurance has risen by nearly 42 per cent

Worrying: Over the past year, Consumer Intelligence said the average quoted price of home insurance has risen by nearly 42 per cent

Motorists are facing a similar premium storm with insurance costs currently rising on average by 43 per cent, according to comparison website Confused.com.

These increases are indicative of what my mailbag has been telling me for the past 18 months, although many readers have been quoted far higher premium hikes at renewal.

Clive Sledger, from Richmond in North Yorkshire, is among them.

Last year, his car insurer wanted to push up the premium on his ten-year-old Kia Ceed by £350 to £585. By shopping around, he managed to find new cover for £440 with Confused.com, thereby reducing the increase from 149 per cent to a more manageable 87 per cent.

Now, Saga has tried to increase his annual home insurance premium from £155 to £353 – an increase of 127 per cent.

'What planet are these people on?' he asked me last week. Not this one, Clive.

Thankfully Clive, an 81-year-old retired farmer, again turned to Confused.com and bagged an altogether more favourable deal.

What is worrying is that, if this tide of premium increases does not turn soon, we are going to see more homeowners take a gamble – and leave their properties and possessions uninsured. It's what is happening in the United States right now.

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Car owners are required by law to have insurance, but more are driving without cover – running the risk of a hefty fine, points on their licence and disqualification.

Others, especially the elderly, are simply calling it a day and selling their motors.

In its manifesto, Labour promises to 'tackle' the soaring cost of car insurance (not a word on home insurance) without saying how. We await its solutions. They can't be as half-baked as the regulator's failed attempt to bring order into the two markets. Surely?

If you have stopped insuring your home and possessions, or stopped driving because of rising insurance costs, I would love to hear from you.

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Long on promises, short on tax guarantees 

Labour's manifesto was long on pages (more than 130 of them), pictures of Sir Keir Starmer (far too many of them) and promises (most, we were told, guaranteed to turbocharge the economy).

Yet there was little on what Sir Keir and his financial lieutenant Rachel Reeves have in mind for a panoply of taxes that they could choose to increase if the economic miracle they are promising fails to materialise – or for that matter, if political dogma simply gets the better of them.

Taxes that chip away at wealth creation look most vulnerable. If I were a betting man, I'd put a fiver on hikes in capital gains tax rates being introduced before 2029 comes our merry way. And I'd put another fiver on higher rate tax relief on pension contributions being scrapped. I hope I am wrong.

It's not just the election you should be voting in... 

Well paid: Nationwide boss Debbie Crosbie

Well paid: Nationwide boss Debbie Crosbie

The General Election is not the only vote taking place next month. Some 16 million-plus members – savers and borrowers – of Nationwide Building Society will also be eligible to vote at (or ahead of) the mutual's annual general meeting on 17 July.

Although the Nationwide vote is apparently as much a done deal as the outcome of the General Election, it's important that customers have their say – not just because the society will make a £1 donation to charity for every vote cast (subject to a cap of £500,000).

As with all building societies, it is the members who own Nationwide, so they should not miss the opportunity to vote. Most will vote online – an easy enough process. But don't opt for the 'quick' vote option which means you end up backing all the resolutions put forward at the AGM. Instead, take your time to read the society's 2024 summary financial statement before voting – and go through the short biographies of the directors (11 in total) who are seeking re-election to the board. I particularly urge members to read through the statement's section on the pay of the society's directors.

In the year to April 2024, chief executive Debbie Crosbie received remuneration of £2.41million. Although down on the £3.4million she earned in the previous financial year, the 2023 total was inflated by £1.7million – a one-off payment to compensate her for the loss of variable pay awards she would have received, had she chosen not to take over the reins at Nationwide and instead stay as boss of TSB.

Stripping this bonus out of the equation, Crosbie received a like-for-like overall pay increase of just under 38 per cent. Some members will view this increase as mind-blowing, both in absolute and percentage terms (earnings growth in the economy is currently ticking along at around 6 per cent).

Others will view it as just reward for running a successful business – one committed to maintaining a strong presence on the high street.

Whatever your view as a Nationwide customer, express it by voting.

Calls to make sure no household is left out 

Improving the country's financial health is not just about governments, current or future, ensuring the public finances are in good order.

Of equal importance is building a society where everyone has access to the services and tools necessary to look after their personal finances without being excluded or discriminated against.

It's a vision that the Financial Inclusion Commission (FIC) has put at the top of its agenda. This week it will publish the preliminary findings of research confirming that many households are being financially ostracised – whether it's a result of not being part of the new digital financial world or an inability to access inexpensive credit or physical cash.

cost of living

It will also call on both Labour and the Conservatives to prioritise national financial inclusion should they win the General Election.

The independent commission has clout. It comprises experts drawn from the financial services industry, charities and the regulatory world. Among them are Sian Williams (chief executive of Switchback, a charity helping ex-prisoners to successfully integrate into society) and John Howells, chief executive of national cash machine network Link. The FIC says any national financial inclusion strategy should be built around five key themes.

These range from ready access to essential financial services such as bank accounts, physical cash, and face-to-face advice through to affordable and well-regulated credit.

These are worthy objectives that I support, and have written about many times. Let's hope Labour embraces them come its revolution starting (barring a miracle) on 4 July.

Mind you, not a dicky bird about these issues in its manifesto.

Election Money

  • What the Labour manifesto means for your finances
  • What the Conservative manifesto means for your finances
  • What the Lib Dem manifesto means for your finances
  • What the election means for investments and pensions
  • How the Tories learnt to love taxing the rich
  • Do Labour or the Tories have the plan we need?

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