The rate of insurance premium tax (IPT) has now increased from 10% to 12% – in a move which will mean the rate has doubled in less than two years. This could push the average annual household insurance bill up by nearly £50.
The tax is payable on most general insurance policies including home, motor, pet and private medical insurance, as well as commercial insurance taken out by businesses.
The Association of British Insurers (ABI) calculates that the latest increase could add an extra £47 to the average household’s annual general insurance bill, based on a family with pets and a young driver in the household.
The rate has now doubled since November 2015, when it was increased from 6% to 9.5% and was hiked again in October 2016 to 10% – making the latest increase the third increase in less than two years.
This comes as rising living costs are squeezing households harder. Inflation hit its highest level in nearly four years in April. The Office for National Statistics (ONS) said the Consumer Price Index (CPI) measure of inflation rose to 2.7% in that month.
The ABI have warned that businesses will also be hit, estimating that the 12% rate could add an extra £300 in commercial insurance premiums.
Whether it’s for your household or business needs, it’s more important than ever to shop around for your insurance. The Military Mutual offers Home, Landlord, Motor and Business insurance for all, as well as Kit Insurance for those serving in the Military. You can get a quote online or call us today 0800 088 2966.