Drivers “would be crazy not to shop around” after the insurance premium tax rise announced in today’s Budget, insurance market experts Consumer Intelligence warns.
- More than 200,000 have switched insurance since November tax rise
- Over-60s are most at risk after insurance tax rise, Consumer Intelligence warns
Its data shows more than 200,000 motorists have switched insurer since the Chancellor boosted Insurance Premium Tax in November with average annual car insurance costs rising £43 in the past year.
Consumer Intelligence - which monitors car insurance for the Office of National Statistics to use in official inflation statistics —predicts as many one million drivers could now switch this year.
It is particularly concerned about the impact on older drivers — average car insurance premiums for the over-60s have rocketed 20% in the past year yet they are the least likely to check premiums.
Around one in four over-60s do not even check prices, Consumer Intelligence estimates, with the result that millions are overpaying.
Ian Hughes, Chief Executive of Consumer Intelligence said:
“Older drivers fear that when they get a much cheaper price they don’t have the right cover.
“That’s not true as they just don’t realise the massive cost of not shopping around. We would encourage all drivers to shop around in 2016, especially those on fixed incomes.
“Over 200,000 car drivers have already shopped around since the November premium tax rise. And with average premiums rising by nearly £43 a year, consumers would be crazy not to check and make sure that they are getting the best possible price.”
Car insurance price rises were already soaring before the Budget with average costs up 13% in the past year to around £683. Average premiums for over-50s are up by 15.3% in the year to February compared to 9.3% for the under-25s. Older drivers still pay considerably less than younger drivers — the average premium for over-50s is £298 compared to £1,600 for the under-25s.
Insurance Premium Tax was increased in the Summer Budget from 6% to 9.5% with the rise taking effect from November 1st and is estimated to raise nearly £1.5 billion and increase prices for motor, breakdown, home, buildings, pet, private medical and mobile insurance.
Notes to Editors
1The cheapest premiums were calculated by comparing the prices offered for 3,600 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were then averaged to produce the index.
About Consumer Intelligence
Consumer Intelligence conducts consumer surveys and benchmarks price and service performance providing unique insights into competitor pricing and customer experiences, their attitudes, opinions and behaviours. For more information, visit the web site www.consumerintelligence.com