On the 1st June the Insurance tax premium (IPT) rate increased from 10% to 12%. This affected motor, home, pet, private medical insurance and insurance taken out by businesses.
This will increase the average spending on insurance by £47 for the average family. Based on a family with pets and a young driver in the household, showing the dramatic increase. Overall the increase is expected to hit younger people more, due to them having more expensive policies.
How much it has increased
In October 2016, the rate was increased to 10%. This move means that the insurance tax will have doubled in less than 2 years, making it the third increase in the past 2 years. Showing the steep incline that the insurance premium has took.
The tax penalises hard working families who decided to take out insurance to protect themselves against many uncertainties.
However, it is not all bad news, the insurance tax is a tax on the insurers, not consumers, therefore it is up to the insurers whether they pass it on to their customers, so some may be in luck. Also compared to other European countries, like France and Germany, insurance premium tax is still lower in the UK.
If you would like to take out any insurance, from a trusted insurance broker, then contact us and see what we can do for you. Click here for more information.