Britons have admitted to cancelling insurance policies due to the adverse impact of rising inflation, according to research by LV=.
The insurer’s quarterly survey of 4,000 UK adults, found 5% of respondents had cancelled some insurance policies to cope with rising inflation as many reported seeing their monthly living costs rise by hundreds of pounds.
A quarter of respondents said their monthly living costs were £250 higher than a year ago and 9% said monthly costs had risen by £500 or more. Retired people had seen their living costs rise on average by £163 a month – nearly £2,000 a year.
As a result, people are choosing many ways to make ends meet.
The survey found rising inflation had meant 36% of respondents were saving less, 34% were buying cheaper brands, 30% were having fewer holidays and dining out, 23% were dipping into their savings and 19% were cancelling some subscriptions.
Around 8% were taking on more credit card debt and loans, while 5% were turning to family and friends and for help and the same percentage were paying less in pension contributions.
And 13% of those with additional living costs said they were struggling to pay for heating and 10% struggling to pay for food.
Clive Bolton, managing director of savings and retirement at LV=, noted that inflation fears have been rising since last summer.
“Rising fuel bills mean many are making cutbacks to other areas of expenditure while many are dipping into savings, taking on extra debt or borrowing from family to make ends meet,” he said.
“One of the big issues people now face is how to also protect the future spending power of their savings being eroded by rising prices. This is especially true if they keep their money in savings accounts and are reluctant to invest in what have typically higher returning stock-market investments because they fear volatility.”
