Cost of living crisis – what regular payments are most under threat?
Mon 31 Oct 2022
Price increases and rising inflation continue to put a lot of pressure on household finances. A recent survey by YouGov identified some regular subscriptions and monthly payments that people are looking at cutting back on as part of the cost of living crisis impact.
Of the 6 subscription categories, gym memberships were most likely to be stopped completely. 7% of adults surveyed ceased gym subscriptions completely. By comparison, only 1% of adults surveyed stopped their home insurance payments completely.
In terms of making cutbacks to reduce monthly outgoings, about half of those surveyed didn’t make any cutbacks to their car insurance or home insurance (50% and 56% respectively didn’t make any cutbacks). Only mobile and broadband contracts were higher percentages (64% and 67% of those surveyed didn’t make any cutbacks), where people are likely to be tied into contracts. Only 11% of the adults surveyed didn’t make any cutbacks to their gym membership payments.
Only 4% of respondents made cutbacks through choice not necessity for their car insurance and 3% for home insurance.
When it comes to car and home insurance, only 1% of adults surveyed stopped paying completely for home insurance and only 2% for car insurance. Car insurance is a legal requirement in the UK, but home insurance isn’t. Fortunately, people look to be recognising the extremely high-risk decision of not insuring their home and contents.
Around one in ten adults surveyed looked to reduce their car or home insurance payments by switching (13% for car insurance and 11% for home insurance).
So how do I best review my car and home insurance costs
Firstly, remember that the vast majority of people in this survey made the positive decision to continue with their car insurance and their home insurance. In addition, over half of car and home insurance holders didn’t make any cutbacks to their payments.
If you are looking at making cutbacks, these could be achieved by options such as opting to pay a higher excess in the event of a claim, or not covering home contents for accidental damage.
Some policies allow you to pay monthly instead of a lump sum annual payment for no extra charge. This helps you with your budgeting and can save you money each month if you don’t have to pay any charges to spread your costs over a 12-month period. The Police Mutual Car Insurance and Home Insurance policies allow you to pay monthly for no additional charges.
If you are looking at switching insurance providers or making cutbacks in other ways it is important that you consider your personal needs and the value you want your policy to continue to provide.
Some insurance policies may promote a lower headline cost, but either not include certain elements that you personally would find useful or need, or make you pay extra for elements that you want to make use of.
Examples could include:
- choosing a policy that doesn’t charge to make changes during the policy term (e.g. mileage, address and insured driver changes, provision of duplicate documents, changes to cover levels)
- including a courtesy car so you can remain mobile if your car needs to go in for repairs as a result of a claim
- choosing a policy that includes protection for officers travelling to or from work in their car whilst carrying official kit such as their Police Uniform.
Police Mutual car and home insurance policies don’t charge you to make changes to your policy, whilst car insurance includes courtesy car and Police official kit protection as standard.
So, it pays to look beyond the headline cost and get a policy that works for you and your specific needs.
If you do decide to investigate switching, Police Mutual Insurance policies also allow you to switch from your existing provider to Police Mutual without having to wait until your renewal date.
Check out more about Police Mutual Car Insurance and Home Insurance here.
Car Insurance and Home Insurance is provided by Royal & Sun Alliance Insurance Ltd.
PMGI Limited is authorised and regulated by the Financial Conduct Authority. Financial Services Register No. 114942. Registered in England & Wales No. 1073408. Registered office: 80 Fenchurch Street, London, EC3M 4BY.
Type of article: Articles
Category: Saving my money
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