Debt fears and a reduced capacity to spend will lead to many Britons skipping travel insurance and holidaying at home this year, Norwich Union claimed today.

According to the insurer, foreign travel is one of the major casualties of the rising food and fuel prices experienced by consumers over recent months. Around half of those surveyed by Norwich Union said that they would go without travel insurance for their annual trip, while one third are to avoid going abroad due to money concerns.

Responding to the survey, Suzi Fenn a spokesperson for Norwich Union, advised that skipping travel insurance was inadvisable for holidaymakers, despite the financial pressures exerted by the credit crunch.

She said: "Understandably, people are looking to make savings on their holidays this year given the economic climate. The reality is that accidents and illnesses do happen on holiday, and you could end up footing an expensive medical bill if you haven't taken out proper cover."

A similar survey from Legal & General, also released today, shows that around one in four Britons have "changed holiday plans" due to a need to cut costs. More generally, the research found that the credit crunch had led to 39 per cent spending "more time at home."