Currencies

Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

Continue Reading

Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

Continue Reading

Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

Continue Reading

Currencies, Equities

Scary movie sequel beckons for eurozone markets

Just as horror movies can spook fright nerds more than they expect, so political risk is sparking heightened levels of anxiety among seasoned investors. Investors caught out by Brexit and Donald Trump are making better preparations for political risk in Europe, plotting a route to the exit door if the unfolding story of French, German […]

Continue Reading

Currencies

Dollar rises as markets turn eyes to Opec

European bourses are mirroring a tentative Asia session as the dollar continues to be supported by better US economic data and investors turn their attention to a meeting between Opec members. Sentiment is underpinned by US index futures suggesting the S&P 500 will gain 3 points to 2,207.3 when trading gets under way later in […]

Continue Reading

Categorized | Insurance

Insurance premium tax hike ‘will cost families extra £21 a year’


Posted on November 23, 2016

Insurance companies and consumers who want to protect their assets were among the bigger victims of Philip Hammond’s Autumn Statement and they are clearly not happy about it, as Axa branded a further hike in the insurance premium tax from next summer as an “unwarranted attack” on the industry.

To recap, Mr Hammond intends to raise the levy – a tax on general insurance premiums including car and home insurance – from 10 per cent to 12 per cent from June next year.

Amanda Blanc, chief executive of Axa UK, pointed out the move is the third increase in 18 months, calling the latest hike “an unwarranted attack on millions of people simply looking to protect themselves, their families and their key assets”.

“This is a classic case of the Government giving with one hand, in the form of whiplash reforms, and taking with another,” she said referring to Mr Hammond’s pledge in the Autumn Statement to legislate to end the “compensation culture” around such claims – a move the industry welcomes.

“The affordability of insurance is being fundamentally threatened,” she added. “The country is already underinsured and ever rising insurance taxation could have the unintended consequence of making this situation even worse.”

Daniel Lyons, a tax partner at Deloitte, suggests the industry would have been caught off guard by the move, given that the tax had already been raised in the Budget earlier this year. He said:

This will cost the average family – with a house and two cars – an extra £21 a year, bringing their total IPT [insurance premium tax] cost to £126 annually. In less than two years, the IPT rate will have increased by 6%, doubling the rate. This will be unwelcome news for both insurers and consumers.

Simon McCulloch, director of comparethemarket.com, a price comparison website, said:

Our estimates are that, as a direct result of the Government’s increases in IPT, drivers will have to fork out an extra £109 than they paid two years ago to pay for their insurance. We calculate that the average annual motor premium will cost more than £700 going into the new year.