Context
The Association of British Insurers (ABI) had urged the Chancellor to freeze the rate of Insurance Premium Tax (IPT) in the Autumn Statement on 17th November, setting out its reasons for doing so in publishing research results. Both the ABI and BIBA are reported as welcoming the decision by Chancellor not to raise the level of insurance premium tax. As hard-pressed families, businesses and charities battle the rising cost of living, a hike in IPT could have led to people cutting back on insurance cover, leaving them at the mercy of unexpected financial setbacks should they experience misfortune such as flooding, fire or theft.
Key points to note
Research from Public First, commissioned by the ABI, found that 8 in 10 people (79% of respondents) think that an increase in IPT would be unfair. The research also found:
- 7 in 10 people (71%) agree that when other bills go up, most people would likely stop paying for insurance
- Nearly one in five (18%) know someone who has cancelled their insurance because of concerns about wider costs.
- Whilst not being able to pay for energy bills is the greatest concern for respondents, 11% think they are at risk of not being able to afford their insurance over the next year. This is despite continued efforts by home and motor insurers to keep premiums competitively priced – contents insurance, for example, is at a ten year low.
Next actions
None – for information and awareness.