New data shows ‘false economy’ of doubling Insurance Premium Tax since 2015
The ABI is urging the Government to reduce the rate of Insurance Premium Tax (IPT) to reduce the burden on a stretched NHS.
The call comes as latest figures from the ABI show that the number of people covered by personal health insurance has dropped to 1.2 million – a fall of nearly 10% – in the four years between 2015 and 2019. This is the same period during which the Government doubled IPT from 6% to 12%.
The number of people covered by corporate health insurance also fell to 3.5 million, a fall of over 5% in four years, further highlighting the damage caused by successive increases in IPT.
In addition, over the same period:
- Health insurers paid out over £10 billion in claims for important medical treatments including cancer, mental illness and cardiovascular treatment, providing much needed relief to the NHS services and finances.
- Average health insurance premiums rose by nearly 15% for personal health insurance and over 8% for corporate health insurance. As well as an increase in IPT there have been significant increases in medical costs driven by the use of increasingly sophisticated technologies and treatments. These costs are expected to carry on rising going forward.
- The total number of people covered by health insurance fell to 4.7 million, nearly 300,000 fewer people than four years ago.
Commenting on the figures Roshani Hill, Head of Protection and Health at the ABI, said:
“Private health insurers pay out on average £7 million a day, helping people get the treatment they need where and when they want it. As well as providing a vital service to millions of people, health insurance also provides much needed relief to an overburdened NHS. This makes increasing Insurance Premium Tax and driving people away from health insurance a false economy.
“Insurance Premium Tax has doubled since 2015, giving the UK one of the highest rates in Europe. It is time to give responsible people a break and cut the tax on insurance.”
Source: Company Press Release