You are here: Home - Insurance - News -

Consumers in the dark over imminent tax hike

Written by:
Almost half of consumers are completely unaware of an impending tax rise that could see the cost of their motor insurance soar.

The standard rate of insurance premium tax (IPT) will go up from 6% to 9.5% from November, but a survey found that 42% of Brits had never heard of the measure, which was announced during the summer Budget.

Although IPT is levied on insurance companies, the worry is the tax rise will be passed onto consumers through higher premiums.

Worryingly, more than half – 53%  – of people aged 16-24 had not heard of the IPT rise even though young drivers who pay higher premiums are expected to be hit hardest by the tax increase.

Some are expected to see their car insurance bills rise by £50 or more a year, according to the study by UNA, the organisation owned by 12 of the UK’s largest regional insurance brokers.

Experts have warned that the IPT hike could push up the number of uninsured drivers on Britain’s roads.

The insurance sector previously estimated the IPT increase would also add between £10 to £12 to the average buildings and contents policy.

A quarter of consumers (25%) in London claim they are already buying less protection as a result of the IPT rise, the study found.

Tim Ryan, UNA executive chairman, said: “The primary concern with the insurance premium tax rise is that it will now cause a number of consumers to forgo buying insurance, which increases their personal risks, and in the case of motor insurance could mean a rise in illegal drivers. It is certainly a concern that young people remain completely unaware of what’s coming next month. Therefore, these are very worrying statistics.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week