New analysis suggests the lowest-income households have cut vehicle insurance spending by more than a third in real terms in a bid to manage costs.
Some drivers are cutting back on cover, shopping around more frequently, or going without protection altogether, data suggests.
According to the latest figures from the Office for National Statistics (ONS), the poorest fifth of UK households reduced their spending on vehicle insurance by 36% in real terms in the financial year ending 2024. The data shows these households either switched to cheaper alternatives, reduced the number of insured drivers, or insured fewer vehicles to manage rising costs.
New analysis from comparison site Brumble, drawing on the Financial Conduct Authority's Financial Lives 2024 survey, suggests the real impact is being felt across all income groups, with significant behavioural shifts in how drivers approach their cover.
The firm said that:
- 12% of adults (around 6.4 million people) cancelled an insurance policy, reduced their level of cover, or chose not to buy a policy in the past 12 months to save money or because they couldn't afford the premiums
- 15% of motor insurance policyholders have reduced the level of cover on their policy in the last two years to cut costs
- 61% of motor insurance policyholders switched provider when taking out their most recent policy — up from 52% in 2022
- 1 in 4 drivers (25%) aged 25-34 reduced their motor insurance cover in the last two years, compared to just 7% of those aged 75+
- 17% of adults aged 25-34 cancelled, reduced cover, or chose not to buy insurance to save money — significantly higher than the UK average
The FCA data also reveals that among those paying their insurance in monthly instalments, 13% have either missed a payment or found it difficult to make payments in the last two years. For those in financial difficulty, this figure rises to one in three (34%).
The FCA data reveals which groups are feeling the squeeze most acutely:
- Low-income households: Those earning under £15,000 were most likely to cancel, reduce cover, or not buy insurance (16%)
- Young adults (25-34): 17% took action to cut insurance costs — the highest of any age group
- Renters: 16% cancelled, reduced, or chose not to buy insurance vs 8% of outright homeowners
- Those in financial difficulty: 81% now pay in monthly instalments, with 34% missing payments or finding them difficult
- Adults with characteristics of vulnerability: 16% took cost-cutting action on insurance
While average premiums have fallen for several consecutive quarters – now standing at £551 according to the ABI's Q3 2025 tracker – the data suggests many households locked in higher rates during the 2023-2024 peak are now taking more active steps to reduce their costs.
Ryan Hughes, Founder of Brumble, said:
“These figures paint a clear picture: drivers across the UK are being forced to make difficult choices about their car insurance. For many, that means shopping around more aggressively, accepting higher excesses, or cutting cover they might previously have considered essential.
“What concerns us most is the 12% who have reduced or dropped cover entirely. With repair costs at record highs and the average claim now exceeding £4,900, being underinsured can leave drivers exposed to significant financial risk if the worst happens.”
