Finance glossary
Payment Protection Insurance — PPI
Also known as: PPI
In simple terms
PPI was insurance sold alongside loans and credit cards to cover repayments if you fell ill or lost your job. It was widely mis-sold, leading to years of compensation claims.
On this page
What does PPI mean?
Payment Protection Insurance was designed to cover loan, card or finance repayments if you could not work due to illness, accident or unemployment. It was sold in huge volumes alongside credit for many years.
PPI became the UK’s biggest mis-selling scandal, because it was often added without consent, sold to people who could never claim, or its cost and exclusions were not explained.
How PPI claims worked
Consumers who believed they were mis-sold PPI could complain to the lender and, if unhappy, to the Financial Ombudsman Service, seeking a refund of premiums plus interest.
The FCA set a deadline of 29 August 2019 for making PPI mis-selling complaints, so new complaints are generally time-barred now, though limited exceptions can apply (for example, related unfair-commission claims through the courts).
How could this affect me?
The PPI story is a lasting lesson in checking exactly what is added to a credit agreement and whether you could ever actually claim on it. Similar add-on products still exist under other names.
Because the complaint deadline has passed, be sceptical of firms that contact you promising to reclaim PPI — and never pay upfront fees for it.
Things to watch out for
- The FCA complaint deadline (29 August 2019) has passed — most new PPI claims are time-barred.
- Be wary of firms cold-calling to “reclaim your PPI”, especially for a fee.
- Similar add-on insurance is still sold today — check you actually need it.
Know your rights
- PPI mis-selling complaints were subject to an FCA deadline of 29 August 2019; new complaints are generally out of time, though limited court-based exceptions may remain.
- You never need to pay a claims-management company — complaints to a lender and the Financial Ombudsman Service are free.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- FCA, Payment protection insurance (PPI) (opens in a new tab). Accessed 22 Aug 2026.