GoCompare comments as IPT rises to record high
Today as the new Insurance Premium Tax (IPT) rate comes into effect at 12%, GoCompare blasts the government’s decision to once again punish those already paying the most and going back to the well of easy money.
Today’s rise brings IPT to a record 12%, the fourth rise of the tax in just six years. This means since its inception at 2.5% back in 1997, IPT has risen by 380%. In ‘real terms’, if you paid £20 in IPT in 1997, you’d now be paying £96 – but the reality is most drivers will be paying far more than this.
Matt Oliver from GoCompare Car Insurance said; “The government has proved time and time again that it sees IPT as an easy well to draw money from and keeps going back for more. While most people will feel the impact the hardest on their car insurance, in truth families are going to see an impact across the board, whether it’s their home cover, pet insurance or medical cover.
“Motor insurance, where the most people will have felt these rising premiums, is a captive audience and insurers and the government have taken advantage of this for too long. As the cost of living continues to rise and savings rates remain pitiful, to continually punish drivers with higher premiums is cynical at best.
“The worst part of this latest hike is that as IPT is worked out as a percentage of your premium, it will be felt the most by those already paying the most. This means young drivers who already face sky-high premiums are going to see the biggest rises, which will surely impact their ability to get on the road.”
A timeline of Insurance Premium Tax (IPT)
|1 October, 1994||Rises to 2.5%|
|1 April, 1997||Rises to 4%|
|1 July, 1999||Rises to 5%|
|4 January, 2011||Rises to 6%|
|1 November, 2015||Rises to 9.5%|
|1 October, 2016||Rises to 10%|
|1 June, 2017||Rises to 12%|
Matt continued; “While there’s nothing people can do about the IPT rise there are ways for people to cut their premiums and help keep their insurance affordable. These include paying for their policy annually, adding an experienced named driver and buying their policy as far in advance as possible.
“However, the most effective way to save money on your premium is to shop around. Shopping around for your car insurance could save you up to £286* a year. It’s likely most motorists will see their premiums rise substantially at renewal this year and with drivers already being hit with an IPT rise, they need to make sure they’re not paying a loyalty tax as well.”
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Notes to editors:
*51% of consumers could achieve a saving of up to £286.44 with Gocompare.com car insurance based on a comparison of 34 companies. Based on a comparison of independent research by Consumer Intelligence during October 2016.