Around seven in 10 people (69%) have used some form of credit to pay for one or more insurance policies over the past year, new research from Premium Credit has found.

The findings revealed that one in four borrowed more than they had in the previous 12 months for this purpose.

Some people may rely on credit more to help fund their insurance in the future because around a third (29%) of adults that Premium Credit questioned believe their household income will fall over the next 12 months, while 41% of those who use credit to pay for cover say premiums have risen since the pandemic started. Nearly half (49%) said that premiums have stayed the same or fallen.

Premium Credit’s research, based on a sample of 1,017 adults, also showed that around three out of four (73%) customers who have seen premiums rise said they have shopped around more to find cheaper cover, but 13% changed items or got rid of them to help reduce the cost of cover.

Furthermore, 12% of people increased their claims excess, and the same percentage reduced their level of cover.

As a result of not being able to afford their insurance, some customers have had to cancel polices – around 4% of those who use credit to fund insurance have cancelled buildings insurance while 3% have cancelled contents cover.

Premium Credit chief sales officer, Owen Thomas, commented: “Premium finance has become a very cost-competitive means for consumers to buy insurance and better manage their finances through spreading payments. At a time when household finances are under pressure it can be a good alternative to other forms of credit.”

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