Authored by Premium Credit
- Nearly half of the UK will wear more indoors and 45% will limit heating while nearly one in three will cut back on Christmas
- 12.6 million people have taken on more credit to help pay for their insurance
- Premium Credit’s Insurance Index highlights switch to monthly payments for insurance
Wearing more clothes indoors and limiting the use of heating are the main ways people plan to control energy bills this winter, new research1 from the UK’s leading premium finance company, Premium Credit, shows.
Its study into insurance buying found nearly half (47%) of all adults intend to wear more clothes indoors while 45% plan to limit how long heating is turned on for during the day. Some plan even tougher measures with 31% limiting the number of baths or showers they take and 35% planning to not turn the heating on at all if possible. Around 30% will cut down on the cost of Christmas.
The October increase in bills is concentrating minds but nearly three out of four (74%) of adults have already taken action to make bills more affordable with 42% cutting back on leisure activities and 41% buying cheaper food and drink or switching to less expensive brands.
Insurance costs are being targeted – around 3% say they have already cancelled policies while 4% have switched to monthly payments for cover to make it more affordable. The same applies to the October price rises with 3% planning to cancel insurance policies and 3% planning to move to monthly payments.
Premium Credit’s Insurance Index shows 40% of customers who use some form of credit to pay for one or more insurance policy (some 12.6 million people) have borrowed more than they had in the previous 12 months for this purpose (only 2% say they have borrowed less). That is an increase on the 34% who said they had borrowed more in the previous 12 months when Premium Credit’s Insurance Index last reported in May this year. Nearly one in four (23%) blamed rising energy bills for increased borrowing.
Its research found customers are increasingly switching to monthly payments for insurance – 13% who used to pay for car insurance in a lump sum now pay monthly compared with 11% who used to pay monthly but now make a one-off payment. The comparable figures for home insurance are 13% and 10%.
Premium Credit is advising customers to consider premium finance which, for a small charge, enables them to pay monthly for cover instead of in a lump sum. Spreading payments in such a way can help ease cash flow challenges and make paying for vital insurance simpler.
The table below shows the actions people have already taken to afford energy bills and the actions they plan to take in response to this month’s increases.
Adam Morghem, Premium Credit’s Strategy, Marketing & Communications Director said: “Energy bill price rises, and now interest rates, have been major concerns for much of this year and people have already taken action to prepare for winter.
“People are taking a practical approach with limits on heating and plans to wear more clothes indoors to keep warm, but people are also looking at a wide range of savings including showering less and cutting back on Christmas.
“Our existing support for vulnerable customers is tried and tested, and we are reviewing what additional support is appropriate during this time of uncertainty.
“Premium finance is specifically designed for insurance buyers to help make important insurance policies affordable and improve cashflow. Premium finance has become a very cost-competitive means for consumers to buy insurance and better manage their finances. At a time when household finances are under pressure it can be a good alternative to other forms of credit.”