Consumers are borrowing more to pay for insurance, according to research from Premium Credit. The premium finance provider says three-quarters (76%) of customers use some form of credit to pay for insurance – the same as last year – but adds that more than half of these customers (51%) have increased the amount they borrow in the past 12 months.

This year’s research shows those using credit are borrowing an average of £505 to pay for insurance. This is up from £400 last year and £302 the year before that. The increased cost of living was cited by 53% of those using credit as the reason they had turned to debt. This was up from 43% last year.

Around a quarter (23%) of consumers put their use of credit down to increased convenience saying it also helped with managing their finances.

The Premium Credit research suggests that 55% of those using debt rely on credit cards, which is up from 41%. It shows that 11% of these customers had defaulted on repayments during the past year, almost double the 6% recorded last year.

Mona Patel, consumer spokesperson, at Premium Credit said: “Insurance customers are borrowing more to cover their insurance payments due to cost of living pressures rather than insurance premium increases.

“However, it is notable that substantial numbers who are borrowing more are doing so because paying for insurance monthly is more convenient and better for their general budgeting in line with how they pay for other products and services.”