Following George Osbourne’s summer budget announcement in July 2015, we published an article outlining the imminent changes to Insurance Premium Tax (IPT) and what it would mean to insurance consumers across the UK. From 1st November 2015, IPT rose to 9.5%, a 3.5% increase from its original rate of 6%. Since then, millions of people have been forced to pay an increased premium for their insurance cover as providers look to compensate for the increased tax rate.
Those affected by the tax rise include:
- 7.3 million car drivers
- 4.7 million household policy owners
- 3 million pet owners
- 3 million private medical policy owners
However travel insurance has not been affected, as the higher IPT rate of 20% remains unchanged. Life policies and mortgage insurance are exempt.
The effect of the rate change has been a hot topic across the mainstream media. Many consumers have reported that insurance providers are charging excessive premiums, in particular for renewals, since the tax rise came into effect. Since the change, many providers (in all lines of insurance) are not rewarding customers with a reduced premium for maintaining a good claims history. It has been reported via BBC 5 Live that some providers have quoted renewal premiums which exceed the 3.5% increase despite the customer having not made a claim the previous year, leading insurance buyers to feel that providers are using the rate change as a means for unfair financial gain.
At Absence Protection, we understand the challenges schools face when budgeting for staff absences. That’s why if you are renewing or taking out a new policy we will ensure this increase doesn't affect your premium by absorbing the additional increase ourselves. Moreover, for every renewal quote we provide, we’ll send you an identical new business quote to put your mind at rest. To find out how much it will cost to cover your school, college or academy against unexpected staff absences, get an instant quote online here.