Recessionary mindset continues

As Brits make plans for 2011 new research points towards a year of frugal living as 70% of Brits are looking to make cuts to their outgoings with one in 10 (12%) planning large financial cuts.

The UK's top five cuts to outgoings in 2011 will be:

Entertainment budget (74%)
Bills by switching provider (51%)
Food budget (41%)
Travel costs (31%)
Internet/Phone/TV package (29%)

Gareth McChesney, Head of Home and Motor Portfolio Management, Allianz UK, said: "As UK households look forward into 2011 many may face difficult financial choices and as a result it is understandable that those who control the purse strings are looking at ways to save money. People will naturally prioritise what is important to them but there is a danger that by cutting in the wrong places Brits could be left even more at risk."

Recessionary reductions

As a result of the recession already experienced over half (54%) of Brits have already looked to reduce their insurance costs including car and home insurance. Whilst the majority of these (29%) have done this by shopping around for a better deal with the same levels of cover, other strategies have included:

1. Reducing individual item cover (9%)
2. Removing extras e.g. legal cover and courtesy cars (9%)
3. Increasing voluntary excesses (7%)

Kings of their castles?

As a well known house proud nation, reducing their home buildings or contents insurance cover is last on the list of insurances Brits would cut. Despite this however, 56% of home owning Brits are already either unsure if they have enough home contents cover or knowingly choose not to insure themselves fully.  The same applies to 47% of respondents when it comes to home buildings cover.

Clever cuts

Allianz Insurance is urging Brits to look beyond immediate cuts and to think carefully before deciding to cut their spend on insurance protection, as cutting insurance could leave  their treasured possessions  and even their homes under insured or perhaps not insured at all.

Gareth McChesney, continues: "When looking to make household cuts people will naturally prioritise what is important to them. However, there is a real danger that by cutting costs and being underinsured, whether willingly or not, people could find themselves facing a bigger financial headache and bill in the long run. This is particularly the case if they are hit by an unfortunate event for which they could have had adequate insurance protection.

"We would stress, that if people want to protect themselves and their belongings, they need to ensure that they have the right level of insurance cover in place."