Private health insurance has suffered a record slump in demand, because the recession has forced employers and individuals to cut back on the costs of cover.

The number of people buying their own health policies has fallen to the lowest total since the 1970s, according to analysts Laing & Buisson.

The trend has also hit dental insurance – there was a 2% drop in the number of subscribers to stand-alone dental benefit plans last year, in stark contrast to annual growth of 31% in the preceding three years.

With sluggish demand for both medical and dental insurance forecast to continue, more people will be turning to the NHS at a time when it is facing tough spending curbs.