Insurance policies under pressure as British consumers look to save money
A new study by Lightspeed Research has revealed the extent that British people have taken to make ends meet in today’s challenging economy.
The research identified five types of consumer based on their spending behaviour in these
Business as usual, the lucky few who’ve felt no impact (<8%)
Cautious spenders, who don’t need to cut back but are being careful (15%)
Minor cutbacks, those making some savings here and there (30%)<
Back to basics, who are cutting out luxuries and extras (27%)
Strugglers, who’ve had to cut back dramatically, including on essentials (20%).
In total,91% of the 1276 people surveyed are making changes to their spending patterns, whether their actual financial circumstances are forcing them to or not.
18% have cancelled insurance policies, from private medical, critical illness, life, home contents buildings cover and car insurance. 2% of respondents stated that they had cancelled car insurance to save money.
29% stated they had downgraded their insurance policies to reduce their outlay with motor insurance topping the ranking of the most downgraded insurance product at 8%, followed by household contents and building cover at 6% and 5% respectively.
Ralph Risk, Marketing Director at Lightspeed Research, says:
“We all know that people have been cutting back to save money, but it’s fascinating to see the lengths to which some people are going.
“While certain austerity measures such as missing out on snacks and walking or cycling to work could have a positive impact on health and fitness, others such as cancelling insurances are risky and could have serious repercussions and are likely to hit those who need the financial reassurance the most.”
He added: “With consumers feeling the pinch and a growing culture of price comparisons, even if they are happy with their provider, insurance is in danger of becoming increasingly commoditised.
“However, our research shows that there is also the risk that struggling consumers could find themselves underinsured, or even not covered at all for a loss.”
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