In this year’s budget the Chancellor announced an increase to Insurance Premium Tax (IPT), from 9.5% to 10%. This means that after the 1st of October the tax paid by consumers on most types of insurance will go up.
Some cover types are exempt
However, some other types of cover, including life and health insurance, are exempt from IPT, whilst those taking out travel insurance already pay a higher, separate rate, of 20%, which remains unchanged.
Those with existing cover will be unaffected until renewal time
If you have existing cover in place the new rate will only affect you when you need to renew or take out a new policy.
Average per month increase isn’t huge
Fortunately, the increase in IPT shouldn’t mean premiums rise by a great deal in pounds and pence for the majority.
The Government says the new IPT rate will add around £2 to the average annual cost of a fully comprehensive car insurance policy, whilst the average cost of home insurance will go up by £1.
The extra revenue raised has been earmarked for better flood defences across the North East.
Shop around for cover to offset the increase
While the increase in IPT is unavoidable, one of the best ways to offset higher premiums is to shop around for a better deal.
Speak to our friendly experts here at Policy Expert and they’ll help you find out if you could get the same level of cover you already have for a better price.
You might be surprised how much you could potentially shave off the cost of your car or home insurance, which could more than make up for the soon-to-arrive hike in IPT.
As an online insurance broker, Policy Expert help our customers to compare insurance products and find a policy that’s right for them. Customer care is at the heart of everything we do and we have a dedicated customer service team on hand by phone, email or Twitter. For more information speak to one of our experts on 0330 0600 600 or email firstname.lastname@example.org