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Brits cut back on savings and insurance as recession looms

15 September 2008 / by Rebecca Sargent
As the credit crunch looks set to morph into a recession, Brits are cutting back on essential financial products in attempts to cut corners and save money, research from American Express has revealed.

According to the research, as the cost of living exceeds this year’s salary rises Brits are leaving themselves more financially exposed than ever before. The survey of more than 2,000 people found that in total 48 per cent of those questioned intend to make financial cutbacks of some description.

The results found that among the first to be dismissed was a family savings account as Brits need all the cash they can get their hands on at the moment. ID theft protection was also an area that many were happy to cut back on.

More worryingly, areas like travel insurance are also being forgone, in fact, a quarter of those questioned will not be purchasing travel insurance for their winter sun getaway.

According to the research, a pet's health is more important to the majority of Brits than their own, as 27 per cent cut back on health insurance compared to 17 per cent dropping the pet insurance.

Payment protection insurance has also taken a blow, despite unemployment having risen by 5.4 per cent to three in ten, making now the time that Brits could need PPI the most.

Commenting on the findings, Chris Rolland, head of American Express insurance services, said: "Life may be getting more expensive, but it is worrying that 48 per cent of Brits are planning to cut back on the policies that are designed to protect them during hard times. This may well be a false economy as people could end up paying out much more than they bargained for if something should happen."

© Fair Investment Company Ltd