Financial advisers across the UK are warning of a rising trend of canceling private medical insurance (PMI) as businesses and households tighten their belts in the face of rising taxes, inflation and economic uncertainty.
During the Covid pandemic, PMI uptake more than doubled. According to comparison site ActiveQuote.com, sales increased by 100% between November 2020 and January 2021 compared to March to May 2020, as fears over NHS waiting times drove record numbers to turn to private cover.
Now, however, advisers say economic pressures and high tax burdens are forcing many to reconsider their policies or abandon them altogether.
David Stirling, independent financial adviser at Mint Wealth Ltd. in Belfast, said the wave of cancellations is one of the clearest signs of the strain between SMEs and middle-income households.
“There has been a significant increase in PMI policy cancellations this year following the financial attack on the business community,” he said.
“Tax hikes, rising costs, stubborn inflation and economic uncertainty are forcing companies to reevaluate their expenses. PMI, while valuable, is no longer a must-have but back on the nice-to-have list.”
He urged policyholders to explore cost-saving options – such as adding or limiting additional cover – rather than canceling outright.
“PMI has gone from necessity to luxury”
Dariusz Karpowicz, director of Albion Financial Advice in Doncaster, said economic pressures had made PMI an early casualty of a company's cost review.
“Cancellation is certainly gaining momentum, and frankly, who can blame when people are being harassed on all sides? With NI rises and persistent inflation, PMI is often the first to get hit.
“The irony is painful – just as businesses are forced to drop private cover, NHS waiting lists are at record highs.”
He said many companies that offered PMI during the pandemic now see it as an affordable luxury.
Eamon Prendergast, chartered financial adviser at Palantir Financial Planning in Bromley, pointed to another challenge – rising age-related premiums.
“PMI becomes more expensive as we age, as the likelihood of making a claim increases. For many people, the rising costs are unsustainable,” he said.
“Some wealthy clients are choosing to self-fund private treatment instead. This gives them control, but for others, the numbers are no longer high.”
While many are cutting back, advisers are warning against hasty cancellations, stressing that PMI can still be life-saving in some cases.
Scott Gallacher, director of Rowley Turton in Leicester, said: “I understand why some companies are reviewing costs, but PMI can make a significant difference. I personally only benefited from privately available treatment – it saved my hearing.
“Clients have shared similar stories, such as receiving expert cancer care that added years to their lives. If cost is an issue, talk to a broker before canceling altogether.”
Justin Moy, managing director of EHF Mortgages in Chelmsford, said the popularity of PMI has clearly waned as NI contributions and the cost of living have risen.
“Private medical insurance has turned from almost a necessity to a luxury. Businesses are facing higher employment costs and consumers are struggling with higher mortgage rates and inflation. Something has to give, and unfortunately, PMI is often first in line.”
With the autumn budget expected to bring fiscal tightening, experts fear this trend could accelerate in 2026. For many households and small businesses, consultants say, PMI now symbolizes widespread cost-of-living reductions – a product once considered essential is now out of reach.
Amy Ingham
Amy is a newly qualified journalist specializing in business journalism with responsibility for news content at Business Matters, the UK's largest print and online source of current business news.
