ABI calls for IPT freeze

The Association of British Insurers (ABI) is urging the Chancellor to freeze the rate of Insurance Premium Tax (IPT) in the Autumn Statement, which will be delivered on 17 November.

It says a hike in IPT could lead to people cutting back on insurance cover.

This comes after research from Public First, commissioned by the ABI, found that 8 in 10 people (79% of respondents) believe an increase in IPT would be unfair.

The research also found that 71% agree that when other bills go up, most people would likely stop paying for insurance, while 18% know someone who has cancelled their insurance because of concerns about wider costs.

IPT applies to most general insurance policies including motor, home, pet, and private medical insurance. The standard rate of 12% has doubled since October 2015 with £220 raised per household in 2021/22.

Hannah Gurga, ABI Director General, said: “With many families and businesses facing tough financial decisions, the last thing they need is a rise in Insurance Premium Tax. Any increase in the rate of IPT at this time would likely impact those who continue to be most vulnerable to the cost of living crisis and we urge the Government to keep the rate frozen.”