Financial advisers across the UK are warning of a growing wave of private medical insurance (PMI) cancellations as households and businesses grapple with rising taxes, inflation, and ongoing economic uncertainty.
PMI saw a major boom during the Covid-19 pandemic, when concerns over NHS waiting lists led record numbers to seek private healthcare. Comparison site ActiveQuote.com reported that sales between November 2020 and January 2021 doubled compared with the early months of the pandemic.
Now, however, advisers say many policyholders are cutting back or cancelling altogether as financial pressures mount.
David Stirling, an Independent Financial Adviser at Mint Wealth Ltd in Belfast, described the trend as one of the clearest signs of financial stress among small businesses and middle-income families.
“There has been a notable uptick in PMI policy cancellations this year following the fiscal assault on the business community,” he said. “Tax hikes, spiralling costs, stubborn inflation and economic uncertainty are forcing companies to penny-pinch and re-evaluate their outgoings. PMI, while valuable, is now back on the nice-to-have list rather than a must-have.”
He urged policyholders to consider cost-saving adjustments — such as higher excesses or reduced cover — before cancelling outright.
In Doncaster, Dariusz Karpowicz, Director at Albion Financial Advice, said the economic squeeze has made PMI an early casualty in cost-cutting reviews.
“Cancellations are definitely picking up steam, and frankly, who can blame people? With NI hikes and inflation, PMI often gets the chop first,” he said. “The irony is painful — NHS waiting lists are at record highs just as businesses are forced to drop private cover.”
Many firms that introduced PMI during the pandemic, he added, now view it as an unaffordable luxury.
Eamonn Prendergast, Chartered Financial Adviser at Palantir Financial Planning in Bromley, said rising age-related premiums are also pushing people out of the market. “PMI gets more expensive as we age because the likelihood of claiming rises. For many, the escalating cost simply isn’t sustainable,” he said.
While some wealthier clients are opting to self-fund private treatment, others have little choice but to cancel.
Still, advisers are cautioning against hasty decisions. Scott Gallacher, Director at Rowley Turton in Leicester, said PMI can be life-saving. “It can make a critical difference,” he said, recalling his own experience of receiving hearing treatment only available privately.
Justin Moy, Managing Director at EHF Mortgages in Chelmsford, summed up the mood: “Private medical insurance has gone from a near-necessity to a luxury. Businesses are facing higher employment costs and consumers are juggling mortgage rates and inflation. Something has to give — and PMI is often first in line.”
With further fiscal tightening expected in the Autumn Budget, advisers fear the trend will deepen into 2026, turning what was once an essential safety net into another casualty of the cost-of-living crisis.
