Holidaymakers are being urged to take out travel insurance even if they intend on travelling closer to home.

According to research by American Express, 30 per cent of people are cutting back on insurance as a bid to reduce costs with more travellers opting for single trip travel insurance compared to last year.

Yet with more people staying closer to home during the recession, Chris Rolland, head of the credit card providers Insurance Services, advised that holidaymakers travelling in the UK should opt for multi-trip annual insurance rather than single-trip insurance.

He stated that although a single trip policy is more tempting in the short-term as it may seem cheaper, holidaymakers who take other breaks within the UK could find themselves out of pocket if something goes wrong such as the need for a cancellation as a result of being made redundant.

Mr Rolland said: "With 'staycations' on the rise, it's still important to make sure trips closer to home are covered so that you're not out of pocket if you have to cancel the trip or if something goes wrong."

Earlier this week, the Association of British Insurers urged holidaymakers to ensure they purchase travel insurance due to the current outbreak of swine flu.