Compare My Health Insurance

Will the Labour Party Increase Insurance Premium Tax?

As of now, specific future policy decisions regarding the Insurance Premium Tax (IPT) under a Labour government are not set in stone and can change based on various economic and political factors.
Let's look at the past to see if its a guide for the future and what could a potential increase mean for our Private Medical Insurance Premiums.

Understanding Insurance Premium Tax (IPT)
Insurance Premium Tax is a tax on general insurance premiums. It’s currently levied at two rates:

• Standard Rate: 12% for most insurance policies.
• Higher Rate: 20% for travel insurance, mechanical/electrical appliances insurance, and some vehicle insurance.

Labour Party's History with IPT
Historically, the Labour Party has shown a willingness to adjust taxes, including IPT, as part of their broader economic strategy to fund public services and achieve social goals. Here’s a brief overview of Labour’s history with IPT:

• 1997-2010 Labour Government: During Labour's time in power, IPT saw several changes. In 1997, the standard rate was increased from 2.5% to 4%. By 1999, it was further raised to 5%. These adjustments were part of broader efforts to increase revenue for public services.
• 2015 Election Campaign: In the run-up to the 2015 General Election, Labour did not specifically commit to further IPT increases, but their emphasis on funding public services suggested that tax adjustments, including IPT, could be on the table.

Previous Government’s (Conservative Party) History with IPT
The Conservative Party has also made significant changes to IPT, reflecting their approach to managing public finances and funding public services. Here’s a brief overview of the Conservatives' history with IPT:

• 2010-2015 Coalition Government: During this period, the IPT standard rate remained stable at 5%.
• 2015-2019 Conservative Government: Significant increases were made to IPT. In November 2015, the standard rate was raised from 6% to 9.5%. It was further increased to 10% in October 2016, and then to 12% in June 2017. These increases were part of broader fiscal measures to balance public finances.

Labour Party's Stance on IPT
The Labour Party's policies on taxation, including IPT, can vary based on their broader economic and social goals. Historically, Labour has focused on increasing funding for public services, which can sometimes involve adjustments to various taxes. However, any specific plans to increase IPT have not been announced, with Labour leaning towards the taxation of the super rich and energy giants as part of their election manifesto.

Factors Influencing IPT Decisions

• Economic Conditions: The overall economic environment, including GDP growth, inflation, and public debt levels, can influence decisions on adjusting taxes like IPT.

• Public Services Funding: Labour’s commitment to enhancing public services such as the NHS, education, and social care might necessitate changes in tax policies.

• Insurance Market Impact: Any changes to IPT would consider the impact on the insurance market, including affordability and accessibility of insurance for consumers.

COMPARE HEALTH INSURANCE NOW

How a Rise in Insurance Premium Tax (IPT) Could Affect Private Medical Insurance (PMI) Premiums

A rise in Insurance Premium Tax (IPT) can have a direct impact on the cost of Private Medical Insurance (PMI) premiums. Understanding these implications can help you make informed decisions about your health insurance coverage and find the best deals available.

Impact of potential IPT Increase on Private Medical Insurance

• Higher Premium Costs: An increase in IPT means that the tax component of your PMI premiums will rise. For example, if IPT is raised from 12% to 15%, the additional tax will be added to the base premium, making the overall cost higher. This increase can be significant, especially for comprehensive plans with higher premiums.

• Reduced Affordability: As premiums become more expensive due to higher IPT, some individuals and families may find it harder to afford PMI. This could lead to a reduction in the number of people opting for private health insurance, potentially increasing the strain on public healthcare services like the NHS.

• Impact on Cover Choices: Higher premiums might force policyholders to reassess their coverage options. Some may choose to downgrade their plans to more basic coverage to keep costs manageable, while others might seek to remove optional add-ons like dental or optical care.

• Market Competition: Insurers may respond to an IPT increase by adjusting their pricing strategies and offering more competitive rates or additional benefits to retain and attract customers. This could lead to more varied options in the market but also requires careful comparison to ensure you get the best value.

-

How Compare My Health Insurance Can Help

Compare My Health Insurance is free health insurance comparison service in the UK that can assist you in navigating the complexities of the health insurance market, especially during times of tax changes. Here’s how we can help:

• Whole of Market Comparison Tools: Compare My Health Insurance works with a network of FCA regulated health insurance brokers that will help you to compare policies from various providers side-by-side. This helps you identify which policies offer the best value for money, even with a potential increase in IPT.

• Tailored Policies: Our Health Insurance Brokers to tailor your search based on your specific needs and budget. Whether you’re looking for basic coverage or a comprehensive plan with additional benefits, the platform allows you to find options that match your criteria.

• Expert Insights and Reviews: The platform provides expert reviews and customer feedback on different insurers and policies. This can give you a clearer picture of the pros and cons of each option, helping you make an informed decision.

• Ongoing Support and Aftercare: Compare My Health Insurance’s partners will keep you updated with the latest changes in the market, including adjustments in premiums due to IPT changes. This ensures you have access to the most current information when comparing policies.

• Private Health Insurance Cost-Saving Tips: CompareMyHealthInsurance.co.uk often features articles and tips on how to save on health insurance, such as taking advantage of discounts, bundling policies, or choosing higher excess options to lower premiums.

• Personalised Assistance: If you’re unsure about which policy is right for you, Compare My Health Insurance have partners who can provide personalised assistance. You can speak with advisors who can guide you through the process and help you find a policy that fits your needs and budget.

• By leveraging the resources and tools available on Compare My Health Insurance, and with the expert guidance of FCA-regulated brokers, you can mitigate the impact of an IPT increase on your PMI premiums. This ensures you continue to receive the health coverage you need without unnecessary financial strain.

How to Keep Informed..

To stay updated on potential changes to IPT:

• Monitor Party Manifestos: Check Labour’s official website and their election manifestos for any announcements on tax policies.
• Follow News Outlets: Reliable news sources often provide analysis and updates on policy changes.
• Keep checking CompareMyHealthInsurance.co.uk: For up to date information, and we'll help you speak with a health insurance advisor who can help you navigate potential changes in your premiums.

Our Final Thoughts

While it's uncertain at this stage if the Labour Party will increase Insurance Premium Tax, staying informed and prepared can help you adapt to any changes. Keep an eye on official announcements and consider consulting with financial experts to ensure you remain well-prepared for any policy shifts.

If you'd like to Speak to One of Our Friendly FCA Regulated Advisors about your health insurance policy just click the link, share your requirements and we'll do the rest.

Thanks for reading!

Get a Quote