A GlobalData survey found that monthly payment options play a critical role in maintaining insurance coverage across personal lines, particularly as household budgets remain under pressure. Meanwhile, research indicating that consumers may reduce or cancel cover if instalment options are unavailable highlights the importance of flexible payment methods in supporting insurance affordability.
GlobalData’s 2025 UK Insurance Consumer Survey found that 36.4% of motor insurance customers and 38.5% of household insurance customers pay for their policies monthly. These figures demonstrate that a substantial proportion of policyholders rely on spreading costs over the year rather than making a single upfront payment. For many consumers, monthly instalments make insurance more accessible and easier to manage alongside other household expenses.
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Recent research from finance company Premium Credit found that 22% of respondents would sell their car if they could not spread the cost of motor insurance, while 16% said they would stop purchasing home buildings or contents insurance altogether. While paying annually is often cheaper overall, the upfront cost can be prohibitive for many households—particularly following several years of elevated inflation and rising insurance premiums. Monthly payment plans, therefore, serve not only as a financing mechanism but also as a means of maintaining access to essential protection. If consumers are forced to prioritise affordability over coverage, there is a risk that some may opt for lower levels of protection, increase excesses, or forgo optional cover altogether, potentially increasing levels of underinsurance across the market.
For insurers, the findings reinforce the importance of balancing affordability with profitability when designing payment options. While instalment plans can increase administrative costs and introduce additional regulatory considerations, they also help insurers retain customers and reduce the risk of underinsurance. Providers that can offer flexible, transparent payment solutions while clearly communicating the value of cover are likely to be best positioned to support customer retention and maintain protection levels across personal lines insurance.
