It was announced in the 2010 Budget that Insurance premium tax (IPT) will rise from 17.5% to 20% from 04 January 2011. This will mean that for every £10.00 of insurance paid today (including tax) there will be an extra £0.21 added to the premium in January. Although this doesn’t sound like a lot when it comes to the smaller premiums it will start to make a difference for people who are already paying more for their travel insurance.
People who need to declare pre-existing medical conditions or are over 75 already have higher premiums to pay and the added tax will only make it more expensive for people who just want to go on holiday. This may even lead to some people choosing not to take out insurance in a bid to save money, forgetting about the risks of not being insured.