Is my PPI refund calculation correct?

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ryl10
ryl10 Posts: 3 Newbie
in Reclaim PPI & other insurance
I recently received a refund from Barclays on PPI, but I'm having trouble understanding how the interest refunded was calculated. The policy started on 1 October 2010 and ended 2 January 2020, where I was paying £8 per month PPI over that period.

My refund includes:
£896.00 of PPI premiums paid
£161.49 of interest on the premiums paid
£395.54 statutory compensation interest
(deduction of statutory compensation interest income tax at £79.10)

Can anyone help me understand if these interest refunds are correct?
«1

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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    Looks fine.
  • brettcta
    brettcta Posts: 4,693 Forumite
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    I’m surprised to see Barclays we’re still selling it in October 2010
    helpful tips
    it's spelt d-e-f-i-n-i-t-e-l-y
    there - 'in or at that place'
    their - 'owned by them'
    they're - 'they are'
    it's bought not brought (i just bought my chicken a suit from that new shop for £6.34)
  • [Deleted User]
    [Deleted User] Posts: 26,612 Forumite
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    brettcta wrote: »
    I’m surprised to see Barclays we’re still selling it in October 2010
    ..and too small a premium to be mortgage PPI which is still sold to this day, of course.
  • brown1950
    brown1950 Posts: 264 Forumite
    edited 24 January 2020 at 12:09AM
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    zx81

    Can you explain in more detail why ' in your opinion ' the £161.49' refund of interest paid
    over a 10 year period looks fine ?
  • Bermonia
    Bermonia Posts: 977 Forumite
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    Looks like Browns out of hibernation... I told you lot not to wake him
  • [Deleted User]
    [Deleted User] Posts: 26,612 Forumite
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    Bermonia wrote: »
    Looks like Browns out of hibernation... I told you lot not to wake him
    :T
    :rotfl::rotfl:
  • -taff
    -taff Posts: 14,501 Forumite
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    brown1950 wrote: »
    zx81
    Can you explain in more detail why ' in your opinion ' the £161.49' refund of interest paid
    over a 10 year period looks fine ?




    No.


    Next question.
    Shampoo? No thanks, I'll have real poo...
  • brown1950
    brown1950 Posts: 264 Forumite
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    Nice to see the usual suspects on this site are still around with their usual friendly comments.

    Would be nice however if somebody with the 'knowledge' could provide a proper answer to my question ?

    If you don't know the answer to my question addressed to ZX81 then don't respond with 'childish answers'
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
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    Maybe it would help if you could explain why you think the £161.49 isn't fine/correct?
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
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    Or you could replace the the relevant figures in this explanation if you really think it's wrong.
    You have paid 27 PPI premiums of £47.65 at monthly intervals up to the present date (to simplify the calculation, it will be assumed you last paid the premium exactly one month ago)

    The total premiums paid = 27 x £47.65 = £1,286.55

    The 8% per annum simple interest is equivalent to 2/3 of 1% per month.

    Monthly compensation on each PPI premium = £47.65 x 2 / 300 = £0.31767 (i.e. about £0.32 per month)

    The first PPI premium was paid 27 months ago,
    the second PPI premium was paid 26 months ago, the third PPI premium was paid 25 months ago, and so on until the last PPI premium was paid 1 month ago.

    Total interest payable = £0.3176 x ( 1 + 2 + 3 . . . . + 25 + 26 + 27)

    Adding all the numbers from 1 to 27 gives a total of 378 monthly-interest payments.

    So the total interest due on the PPI premiums is £0.31767 x 378 = £120.08

    Therefore, the total refund & compensation = £1,286.55 + £120.08 = £1,406.63

    Compensation for interest lost on PPI premium payments ‒ Example 2

    You have paid 27 PPI premiums of £47.65 at monthly intervals, the last premium was paid exactly 18 months ago.

    The total premiums paid = 27 x £47.65 = £1,286.55

    Monthly compensation on each PPI premium = £47.65 x 2 / 300 = £0.31767, as for Example 1.

    The first PPI premium was paid 44 months ago. (= 18 + 27 –1), yes, subtract the one, the second PPI premium was paid 43 months ago, and so on until the last PPI premium was paid 18 months ago.

    Total interest payable = £0.3176 x ( 18 + 19 + 20 . . . . + 42 + 43 + 44)

    Adding all the numbers from 18 to 44 gives a total of 837 monthly-interest payments.

    So the total interest due on the PPI premiums is : £0.31767 x 837 = £265.89

    Therefore, the total refund & compensation = £1,286.55 + £265.89 = £1,552.4

    Compensation is payable, in theory anyway, up to the date of actual payment so you should count the time in months up to the date you are paid. This could be several months after the date of your claim.

    Speeding up the addition

    If you want to quickly add: ( 18 + 19 + 20 . . . . + 42 + 43 + 44)

    If you add the first number and last number, 18 + 44 = 62
    If you add the second number and second-from-last number, 19 + 43 = 62

    You get the picture - each pair of numbers adds to 62

    Since there are 27 numbers to be added, there must be 27 / 2 pairs.

    So the total of all the numbers is 62 x 27 / 2 = 837
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