IPT increase will lead to more uninsured drivers, says AA

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IPT increase will lead to more uninsured drivers, says AA

Fri 18th Jun 2010

Increasing Insurance Premium Tax (IPT) could lead to a rise in the number of uninsured drivers on the country's roads, the AA has warned.

Edmund King, the organisation's president, urged the government not to raise the tax in next week's Budget as it would disadvantage the most vulnerable people in the country.

IPT is applied to all insurance products and there has been speculation that it could be increased from its current five per cent to ten per cent.

"Such an increase, added to the sharply rising cost of car insurance, could see more than 50 per cent added to the average family's car insurance bill in just two years," Mr King commented.

He noted that young drivers would bear the brunt of a tax increase, with most males under the age of 21 already paying more than £1,000 per year for car insurance cover.

Mr King added that pushing up the rate of IPT could be the final straw that prompts people to go without insurance.

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