According to the travel association, ABTA, the number of people taking out annual cover – which is recommended by ABTA as the most cost-effective insurance for people taking more than one trip per year – has also gone down significantly, from 30% in 2011 to 23% in 2012.

Male travellers and younger travellers are most likely to travel uninsured, with men 8% less likely then their female counterparts.

Nearly half of 15-24 year olds travel abroad uninsured. Londoners and those in the East of England and Northern Ireland are also less likely than average to purchase a policy.

John de Vial, head of financial protection, ABTA said: “The increase in the number of people travelling uninsured is alarming. In these tough economic times holidaymakers may feel pressure to cut costs but travel insurance is an essential.

“Now is a popular time to book a holiday and we strongly advise people to buy travel insurance at the same time. We hear too many horror stories of people who have forked out huge sums of money or not got the right treatment because they’ve had an accident abroad and been uninsured.”

Many travellers also appear to be unsure what travel insurance is for. 16% of consumers mistakenly believe that travel insurance is unnecessary as the UK government will pay for their treatment if they become ill abroad.

17% of travellers also wrongly assume that when travelling in Europe, they don’t need insurance because they have a European Health Insurance Card (EHIC), but this only provides access to basic state medical care and will never cover the costs of repatriation to the UK, whether by regular flight or air ambulance.

A third of 15-24 year olds think this is the case.

Lynda St Cooke of the Foreign & Commonwealth Office said: “It is important that people understand what the FCO can and cannot do to help British nationals who get into trouble abroad.

“We cannot pay medical bills so it is vital that you have a comprehensive travel insurance package for trips overseas. We also advise reading the small-print to check that your policy covers you for everything you want to do on holiday. If in doubt, contact your insurance provider.

“Having an EHIC is a must when travelling in Europe as it gives you access to free or reduced cost basic state-funded care.

“But you still need full travel insurance as the EHIC doesn’t cover private treatment or repatriation to the UK if you are seriously ill. For further advice and tips on preparing for your holiday, visit our website at www.fco.gov.uk/travel.”

Travellers are warned that even those with insurance may not be fully protected as one in ten travellers is guilty of ‘buying blind’ and not making sure they know what they are covered for.

This is particularly true of those enjoying winter sports, as a third of skiers and snowboarders do not take out the necessary specific cover.