Over £126bn was borrowed in the first half of 2019 alone and yet most borrowers are not protected should the breadwinner be unable to work or – worse still – die.

The main reason for this is that protection is no longer considered an automatic requirement in the mortgage advice process – the irony being that borrowers are required to purchase buildings insurance to protect the lender, but borrowers aren’t required to protect themselves.

This is in contrast with countries like France, where mortgage protection that covers the family in case of death or disability is mandatory.

UK repossessions on the rise

In the UK, repossessions are rising, which highlights a growing problem with indebtedness and borrowers’ inability to pay when a problem occurs.

The most common reasons for repossessions are loss of employment or health issues – and very often the two are directly linked. And, of course, repossession figures don’t account for the many families who are struggling financially for the same reasons, on the brink of collapse.

Borrowers also face many risks when they take on a mortgage. Taking serious illness alone, there are 363,000 cancer diagnoses every year – and 85,000 people admitted to hospital having had a stroke. Figures like these are well covered in the press, but the industry is still turning a blind eye to the risks faced by borrowers, leaving clients hugely vulnerable.

This is why I believe that at least discussing protection should be mandatory in the UK. And until that’s the case, advisers have a moral and arguably TCF duty to raise awareness of how ill health or unemployment can affect a person’s ability to pay their mortgage.

The moral responsibility for advice

Historically, most banks and building societies ensured that protection was raised – understanding that they had a duty of care. But the responsibility to raise the subject now sits almost exclusively with mortgage brokers, as lenders have stepped away from providing advice and even checking whether borrowers are protected. There is a combination of reasons for this: from the RDR to the closure of branch networks, loss of advisers, and the PPI scandal.

For me, excuses like this are growing tired, especially when so many families in the UK are unprotected. Treating customers fairly should be the priority above all else. Brokers have an obligation to ensure that everyone has the opportunity to receive personalised protection advice and quotes. Ideally, this should also be a regulatory requirement, but until such time, it should at least be a TCF and moral requirement of being offered a mortgage.

Time to embrace technology

Many brokers find the protection conversation difficult to raise and complicated to have – not to mention the fact that the products are highly regulated.

The good news is that the technology now exists to enable every borrower to be offered personalised, FCA-regulated advice and quotes automatically, based on the information gathered in the mortgage fact-find.

This process can be run alongside a mortgage application, and even retrospectively – all a broker needs to do is provide context for the advice and explain the risks.

This technology is already being employed by challengers like Starling Bank. The combination of Google-grade technology and Starling Bank’s open banking data means they’re able to identify customers with a protection need and deliver advice consistently and compliantly – but also in a way that’s highly personalised, engaging and actionable for customers. This is exactly what the future of protection advice should look like.

Even if protection is not made mandatory, as in France, I do think it should at least be mandatory to offer advice and make borrowers aware of their risks. Advances in FCA-compliant technology mean there really is no reason why every broker should not be looking to ensure that all borrowers receive protection advice.

David Vanek, chief executive, Anorak Technologies