Insurance premiums rise with Budget
Chancellor, George Osborne, announced in the 2010 budget rises in Insurance Premium Tax (IPT) which affects car home and travel insurance.
From 4 January next year people will pay 6% tax (currently 5% included in overall price). The increase translates to an average £18 a year in tax on a typical £300 car insurnace premium.
Young drivers who pay much higher premiums will be hit hardest. This comes at a time when drivers have already been hit by hikes in the price of their premiums –as much as 20 percent in the last 12 months.
Eric Galbraith, chief executive of the BIBA commented “Biba’s research last year demonstrated that businesses and consumers were reducing insurance cover as a result of the recession, and we are concerned that increases to insurance premiums as a result of IPT could lead to even further underinsurance or even a lack of insurance protection. The last thing people need in a financial crisis is a higher insurance bill,” he said.
History of IPT
Introduced in 1994 at a flat rate of 2.5%.
It was increased on general insurance products to 4% in 1997
Increased to 5% two years later.
Increased by Conservative-Liberal democrat government to 6%
CompareChecker views the increase in IPT along with the increase in premiums made by insurers, admittedly to cover underwriting losses, to be yet more incentive for consumers to compare car insurance on the major comparison sites to get the best cover at the best price for them.
Flex Luthor is a graduate turned entrepreneur known for his involvement in the widely opposed attempt to launch the first price checker for comparison sites, comparechecker.com
