IPT increase hits young drivers
Following yesterday’s Autumn Statement, Insure The Box has called for the government to stop increasing the cost burden on young drivers via increased rises in Insurance Premium Tax (IPT).
Charlotte Halkett, general manager of communications at the telematics insurance provider, said, ‘Whilst the Autumn Statement suggested a real commitment from the government to invest in the future of science and technology to improve people’s lives, there is a glaring cost increase for some of the most financially vulnerable in our workforce. There was much talk of helping the ‘JAMs’ but yet another increase in IPT – this time rising by two per cent up to 12% – seems counter-intuitive to this goal. IPT hits all motorists hard, many of whom will need their car to get to and from work.
‘In less than two years, IPT will have doubled from six per cent to 12%, and it is some of the most financially vulnerable that are hit the hardest. IPT disproportionately affects younger drivers, who have higher premiums than average. These continuous hikes therefore add to an already frustrating outlook for young motorists, many of whom are at risk of finding themselves priced out of driving altogether. Even worse – they could consider taking the risk of driving whilst uninsured.
‘The latest increase means that a typical young driver paying £1,250 for their insurance pre-tax will have seen their IPT bill rise from in £75 in October 2015, when the rate was six per cent, to £150 in June 2017, when the rate will be 12%. There is no exemption being offered for the youngest drivers and we believe this puts even more emphasis on the value of technology-driven solutions, such as telematics.’