More than 100,000 British financial services jobs are likely to be lost to overseas locations, such as India and China, as insurers and banks struggle to cut costs.

India and Outsourcing: Complete Coverage

An official for the financial services consultancy Troika said that up to 20,000 jobs had already been moved to India, or less than 5 per cent of back-office staff in life and pensions, general insurance, retail and investment banking and mortgage and credit-card processing.

At least 40,000 more jobs in the life and pensions and general insurance industries and 60,000 in banking are likely to be moved abroad within five to seven years, he said.

Financial services providers face huge pressure to cut costs.

Coupled with the advent of cheap global communications and the emergence of skilled workers in developing nations, the temptation for companies to shift jobs abroad was high.

More efficient processes are likely to include outsourcing and off-shoring to India and South Africa, where costs are roughly ten pounds per policy, as opposed to 30 pound plus in the UK.

The predictions comes just days after Patricia Hewitt, Trade and Industry Secretary, said it is important to avoid protectionism on job transfers. She spoke amid controversy over the Lloyds TSB bank shifting 750 full-time jobs from Newcastle to India.