Struggling households expose themselves to financial meltdown

Nearly half of Brits plan to cut corners on financial products like travel insurance in a bid to save money, according to American Express Insurance Services.

With the cost of living outstripping salary rises, the new research suggests many people are planning to cut back on financial products, even though this may leave Brits financially exposed and more vulnerable to the uncertain times ahead.

American Express Insurance Services asked a GB representative sample of over 2,000 adults which financial products they were mostly likely to stop making regular payments to as the rise in the cost of living starts to be felt.

What is falling off the financial priority list?

While many Brits are still searching for a last minute summer holiday deal, nearly a quarter plan to cut corners and axe their travel insurance (24%) in a bid to save the pennies.

Long term future plans are being put on hold as nearly half of Brits say intend to stop making regular payments to their family savings plans (44%), and 21 per cent propose to halt their investments towards Child Trust Funds.

Brits are putting their favourite pets before their partners; more than a quarter are expecting to axe their family health insurance (27%), compared to just 17 per cent who plan to stop making payments towards pet insurance.

Although unemployment in the UK has now risen to 5.4%, three in ten (30%) Brits are preparing to get rid of their payment protection insurance at a time when they are most likely to need it.

Despite the legal requirements for car and home insurance; one in twenty (5%) plan to bring these monthly payments to an end (2% and 3% respectively).

Chris Rolland, Head of American Express Insurance Services commented: "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.

"American Express is more than just a card; we understand that to a growing number of Brits there are never enough hours in the day, and as people start to feel the financial pressure, things are being dropped from the priority list. We can take the hassle out of insurance, leaving fewer Britons financially exposed."

The three most common causes for insurance claims are for medical and cancellation reasons as well as claiming on lost or damaged baggage. Having a good quality insurance policy will allow Brits to enjoy their holiday abroad and within the UK with the assurance that they are protected should any of these things happen to them.

American Express Insurance Services offers a number of opportunities to help Brits make the most of the insurance cover that will protect them when they most need it:

Five per cent discount to all online customers when they purchase travel, motor or home insurance.

Free iTRAK luggage labels for all customers who purchase Gap year insurance (by registering a label's unique reference ID, the iTRACK system will track down any luggage that goes missing and text its location to the customer.)

Annual travel insurance for customers planning more than one trip in a year makes it more cost effective than multiple single trip policies.

Repayment Protection is available for existing card members which provides sickness and unemployment cover; giving peace of mind should the worst happen.