How to spend PPI refund cash?

The rising cost of living, from spiralling petrol prices to increased bills, has seen many normal households in the UK struggling to make ends meet or put money away for a rainy day, but refunded payment protection insurance claims could help people to get on a more even financial keel.

While it may be tempting to blow money repaid following a payment protection insurance claim it makes more sense long term to put the cash away in a savings account, or use it towards a retirement fund or pension.

Savings
If you are looking for a high interest savings account for your payment protection insurance payout then the Coventry Building Society Online Saver could be ideal. With a minimum investment of just £1, this account has a 3.17 per cent interest rate and also allows savers four penalty free withdrawals each year.

Pensions
The mounting cost of living also means that the pensions which people already have may not be up to scratch and could leave them short of cash in the years following their retirement, so if you have been awarded payment protection insurance, why not consider using it towards your pension fund?

Pay off mortgage?
A popular choice for many people who come into money expectedly is to pay off their mortgage, but doing so can often be a kneejerk reaction which can leave homeowners paying over the odds for their property.

Before using PPI cash to pay off a mortgage there are some things to keep in mind. Firstly, those with fixed rate mortgages or those who benefited from a special offer deal may find that they are severely charged for overpaying, making it a wiser move to just stick to a current payment schedule.

Other Debts
As well as this, many homeowners have more pressing debts than their mortgage – if you have a mortgage on a fixed rate, which is affordable to you each month, then wouldn’t it make more sense to pay off credit cards or other debts which have a high interest rate and are building each month?

Emergency Cash
Ask most people if they have ever had a need for emergency cash and the answer is very likely to be yes – whether it be to fix a broken down car, repair a boiler, replace a faulty appliance or bail out a son or daughter studying away, having a stash of cash on hand is seen as essential to most people.

If you are lucky enough to have been refunded a large amount of PPI cash, you could consider putting some aside for emergencies and investing the rest into something else.

Precision Claims can help you to reclaim mis-sold payment protection insurance owed to you. Click here to visit their website.

Tagged cash, debt, investing, Mortgage, pensions, PPI, savings