IPT rise 'will not be welcomed by car insurance customers'

Those who are looking to buy car and home insurance may not be pleased with a recent announcement by the chancellor of the exchequer.

Car insurance customers will not be pleased about the proposed insurance premium tax (IPT) rise, according to one company.

Simon Douglas, director of AA Insurance, which publishes the influential quarterly British Insurance Premium Index, said the proposed increase - announced by chancellor of the exchequer George Osbourne in his budget speech yesterday (June 22nd) - will not impress those looking to buy home insurance either.

The standard rate is set to rise from five per cent to six per cent, while the higher rate is set to match the increase in VAT from 17.5 per cent to 20 per cent.

Mr Dougles added: "I'm relieved that the increase wasn't any greater than that and it shows that the chancellor has been listening to our concerns."

Figures released last week (June 16th) stated that there was a 57 per cent rise in the amount of body injury claims made against motorcyclists, which affected single insurance customers.

By Nate Sawyer