Millions of UK consumers are still paying off debts used to buy insurance despite the policies having expired, research suggests.
A study commissioned by Premium Credit calculated that 2.3 million people in the UK are still servicing debt repayments for insurance products they no longer need, with the average debt at £229. This equates to around £530m in total.
While the majority (43%) had debts of up to £100, one in 20 consumers said they had debts of £1,000 or more.
The survey also found that 41% of consumers are relying on credit in response to price rises on motor, home, pet, travel and life insurance premiums. One in five (21%) said they need to borrow as their disposable income is being squeezed.
The most popular form of credit to spread the cost of insurance is credit cards which are being used by 60%. However, 39% plan to use premium finance and pay monthly for insurance rather than in one lump sum.
Adam Morghem, strategy and marketing director at Premium Credit, said choosing the appropriate credit method can be a sensible, convenient way to purchase insurance.
“Premium finance was specifically developed to fulfil this need and is increasingly being used by UK consumers to buy necessary insurance much more efficiently,” he added.