As you may have seen from yesterday’s news headlines, the Chancellor the Exchequer’s Autumn Statement is due to usher in a series of changes that are likely to have an impact on your finances.
Most notably, The Right Honourable Philip Hammond MP has announced changes to the Insurance Premium Tax, letting agent fees and reduced whiplash claims, which we’ll go through in turn.
Insurance Premium Tax is increasing from 10% to 12%
Insurance Premium Tax (IPT) is due to go up for the fourth time in two years (you can read about previous increases here).
What that means is, as of June 2017, you’re likely to pay more for most insurance products. In fact, it is estimated that the rise will add as much a £51 to the average household’s bills. While the increase is levied on the insurance company, they are likely to pass the cost onto their customers.
In reaction to the news, the British Insurance Brokers’ Association (BIBA) issued a statement, saying:
“Over the past 15 months, policyholders have already seen an increase of 66% in the Insurance Premium Tax (IPT) they pay – this further increase to 12% in this regressive tax is outrageous and is a tax on protection, which will hit everyone and especially those ‘just about managing’.”
He went on to add that this could result in many people not actually buying the protection they need because of the cost.
Landlords to be hit by letting agent fees
Not only will landlords be facing the prospect of an increase in the price of their insurance, but they will also be looking to pay letting agent fees.
The Autumn Statement has banned letting agents charging prospective tenants these fees, for the likes of administration and referencing. It is proposed that these costs will now be paid for by owners of buy-to-let properties, who will have a choice of which agent to use.
The ruling has already been passed in Scotland, but will spread across the rest of the UK in coming months.
Car insurance premiums may go down
In spite of the increase in IPT, there’s a chance we could see a reduction in the price of car insurance.
The Chancellor of the Exchequer Philip Hammond outlined that the Ministry of Justice is currently in consultation about reducing the number of whiplash claims, which is 50% higher than a decade ago. The government is currently looking at removing the right to compensation, or capping the amount that can be claimed.
Of course, if insurers are paying fewer, less expensive whiplash claims, their outgoings will be reduced. As such, insurers have pledged to pass on savings, worth approximately £40 per policy, to the consumer.
While we cannot do anything to reverse these changes, we may be able to reduce your outgoings by finding you a better deal on your insurance. We have access to policies from a wide range of insurance companies, so we can find premiums that meet your needs at competitive prices. Simply give us a call to find out how we can help.
In other news…
The Government is set to remove some employee tax savings made through salary sacrifice schemes. The good news is that pensions are exempt from this change and can still benefit from salary sacrifice.
The Chancellor has also revealed that the ISA allowance will increase from £15,240 to £20,000 in the 2017/18 tax year, increasing the amount that can be saved tax efficiently.