"I am worried that I may loose my Skype Contacts in the same way I lost my contacts on my mobile phone. Is there any way I can make a backup? If so how could I reinstate my contacts, if I needed to?"

You are quite right, it makes sense to back your Skype Contacts up. That way, if disaster strikes, you simply restore the contacts and you're up and running.

• Open and login to Skype.
• Click Tools, move the mouse over Advanced and then select Back up Contacts to File...

The Save As dialog box opens...

• Browse to the directory/folder where you want the backup file saved; in this case the SkypeContactBackup folder (I had created this folder before I started the backup process).
• Click Save (Note the file name is your Skype User name with the extension .vcf)
  

Now copy this backup file to another drive, or maybe even a memory stick, so that if you operating system needs to be reloaded, you still have your backup.

To restore Contacts from the backup file...

• Open and login to Skype.
• Click Tools, move the mouse over Advanced and click Restore Contacts from File...

• The Open dialog box opens
  
• Browse to the directory/folder that contains the backup file (in this case the SkypeContactBackup Folder)
• Select the backup file (in this example dalzielj.vcf)
• Click Open