Brits ‘cancelling policies’ to avoid debt

Almost half of Brits have cancelled important financial protection schemes in a bid to clear debt, it has been claimed.

Research from uSwitch.com has found that 42 per cent of the population have cancelled insurance policies or pension contributions as a way of saving cash in the wake of the credit crunch.

However, this means that 19 million people have put their financial security at risk and left themselves exposed to potential future debts, the firm noted.

Of those who scrapped policies, 15 per cent cancelled car breakdown cover and 15 per cent axed private health insurance.

Insurance expert Ashton Berkhauer said that it is not surprising that people are attempting to cut costs in the current climate.

“The potential impact on you or your family finances if you get it wrong could be huge and long lasting, so it’s important to go into it with your eyes wide open,” he remarked.

Meanwhile, the Competition Commission is continuing an investigation into sales of payment protection insurance.

By Jamie Price