The bills just keep on rising, and there doesn’t seem to be any sign of them stopping anytime soon. And now that the government’s 2% increase on insurance premium tax (IPT) has come into effect, even more ‘just about managing’ families will feel the strain on their budgets.
With the increase, the standard rate of IPT is now 12%. If you’ve not heard of IPT before, it’s because it’s automatically added onto insurance premiums, so you don’t often notice it – you just notice that your policies cost more.
So, what does this rise actually mean and how will it affect your purse strings? The Association of British Insurers (ABI) has calculated that it could add an extra £47 to the average household insurance bill each year. Of course – that’s just the average, those that will be hit the hardest, are those that don’t often have much extra cash lying around – such as young drivers. And if you run a business, then brace yourself – the 12% could add a whopping £300 onto commercial insurance policies.
Whether we like it or not, we know that most taxes creep up in cost, so what’s the big deal with IPT – it’s just another tax rise, after all. Well, the big deal, is that IPT has increased six times since it was introduced back in 1994 and the last increase was less than a year ago. It means that the average cost of IPT for a family insuring two cars (including one young driver), home (buildings and contents), and two dogs, adds up to a staggering £283.
In response, the ABI have called for a freeze on IPT, it is, they have said “a raid on the responsible”. But, in the meantime and until the ABI can persuade anyone to do anything about it, family budgets will keep being squeezed.
Which is why searching for competitive quotes for all your car, van, pet, home and business insurance needs, is an absolute must – unless, that is, you’re not bothered about finding great deals and great value. So, get the most out of your money and comparethemarket.com