ARE you about to renew the insurance on your car or home? Stand by to pay more.
From today, anyone taking out a new insurance will be hit by a hike in the insurance premium tax (IPT).
Announced in the Chancellor’s July Budget, it’s the fourth rise since IPT was introduced in 1994.
The increase, from 6 to 9.5 %, comes into effect for policies sold on or after today, although many consumers will have forgotten it.To read more about your money, click hereOn an average £500 car insurance policy the rise will mean the tax goes from £30 to £47.50. On a typical combined buildings and contents policy, it rises from £9 to £14.50.
“It’s not only home and car policies that will be affected”, says MoneySuperMarket’s insurance expert Kevin Pratt.
“People buying or renewing private medical insurance, mobile phone insurance and pet insurance should expect bill increases too.
“For those affected, there are things that can be done to offset the rise.
“By shopping around for a new deal on renewal, you can save up to £212 on a car insurance policy and £57 on a home insurance policy, which will more than pay for the IPT hike.
“Insurers offer their best prices to new customers, simply to tempt people through the door. It therefore makes sense to become a ‘new’ customer every year by scouring the market for the best deal possible.”
If you have an existing policy that has some way to run, there’s no need to panic.
The rise only affects policies taken out on or after today.
If you are part-way through a policy and pay by instalments, your payments will remain the same until your renewal date.
Before then your best bet is to shop around for the best deal.
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