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A number of changes have been made to Air Travel Organisers’ Licensing (ATOL) to give travellers more protection when heading overseas.

Aside from the benefits offered by travel insurance, the government believes that these changes will lead to around six million people being better protected.

Aviation minister Theresa Villiers commented: "These changes will remove much of the confusion surrounding ATOL, while ensuring operators who offer such holidays provide customers with the financial protection they expect."

She added that recent travel disruption and insolvencies meant that alterations had to be made to the current scheme.

Last month, AA travel insurance found that many people's holiday plans for the coming year are affected by money worries, with 21 per cent of respondents opting not to head abroad.

Almost a third (31 per cent) revealed they have yet to decide on their travel plans for the year ahead.