The ABI has provided data showing that the rise of Insurance Premium Tax (IPT) may have proven to be a false economy.
The rate of IPT has doubled since 2015 and the latest figures showing a drop in personal health insurance falling by 10%. Is the hike of IPT from 6% to 12% playing a major factor in the correlation of these figures.
Even corporate health insurance has been affected with the number of people covered dropping to 3.5 million (approximately 5%).
From 2015 – 2019 it is reported that the total number of people covered by health insurance fell to 4.7 million. This is 300,000 less than four years ago.
Why we believe that Insurance premium tax should be reduced?
As an independent broker we review the cover for our clients on an annual basis and we see the costs of insurance rise. Adjustments for age, medical inflation and claims all play a part where applicable. Has the additional rise in IPT has resulted in people re-thinking their plans for future health insurance cover? In many cases we are able to negotiate discounted premiums for our clients. The additional increase in IPT over this short time period has still had a negative effect for many.
What that means in real terms?
Private medical insurance does mean that many people have treatment privately and do not rely solely on the NHS. The NHS, who are already struggling to cope with demand are then faced with providing treatment for those who traditionally had private medical insurance but feel they can no longer afford it. Surely reducing the rate on Insurance premium tax will encourage people to keep their cover in place?
We believe it is time to realise that those who have private health insurance should not be penalised for it. By paying for health insurance they are costing the NHS far less. We wholeheartedly agree with the ABI’s statement below:
“It is time to give responsible people a break and cut the tax on insurance.”
The information above has been sourced from the ABI and the full article can be reviewed by following the link below:
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