Insurance Premium Tax Hike Effective 1st October

On 16th March 2016, the government announced that the Insurance Premium Tax (IPT) will be subject to another hike. Yet, it will only increase by 0.5 per cent and all the revenue generated from it will fund national flood defences and resilience.

This hike comes just after a previous 3.5 per cent increase on 1st November 2015—resulting in a tax increase of 66.6 per cent since then. While this hike is considerably smaller than the previous one, you should nevertheless familiarise yourself with the increase and its potential repercussions.

Understanding the Tax Hike

The standard IPT will be increased by 0.5 per cent—raising it from 9.5 per cent to 10 per cent—and will apply to insurance premiums starting on 1st October 2016. The government estimates that the hike will generate an extra £80 million in its first year and then an annual average of £205 million in subsequent years.

This annual revenue boost will come from all households and businesses that pay IPT on their insurance. However, there are several policies that are exempt from the IPT, including the following.

  • Life insurance
  • Insurance for commercial ships and aircraft
  • Insurance for commercial goods in international transit
  • Premiums for risks located outside the United Kingdom
  • Export finance

Potential Repercussions

Despite the rise in costs, the government is confident that there will only be negligible impacts to the public and private sectors. These include one-off costs for insurers to update their systems to include the new tax rate. (more…)

Avoid These Fresher Money Mistakes

As uni starts up again, freshers are often faced with financial responsibilities for the first time in their lives. If your child is starting uni next term, help him or her avoid these money mistakes:

  • Paying full price for textbooks – Try to buy used books and then resell them at the end of the term, or rent textbooks instead.
  • Underestimating the cost of ‘cheap’ restaurants – Eating out should be for special occasions only.
  • Overspending at the pub – Avoid buying rounds for your mates. There’s always someone who skips his or her turn. Instead, buy your own drinks or put your money into a shared ‘kitty’ at the beginning of the night.
  • Considering a railcard ‘too expensive’ – A railcard saves you about 30 per cent on all UK rail travel for 12 months. While many students make the mistake of considering it an unnecessary expense, the savings can far outweigh the initial cost.
  • Keeping savings and spending money together – Your savings should always be separated from your living allowance. Otherwise, you could be tempted to take more than you should every now and then, while your savings slowly whittles away by the end of the year.


Where Does An Insurance Broker Fit In To Your Home Insurance?

Going to see an insurance broker for you home insurance policy might not seem the obvious choice for most, but for some it’s the only option.

When a comparison website or a quick route around prominent providers is bringing either no results, or unaffordable premiums, this is the time when an insurance broker can point you in the right direction for effective and affordable protection for your home.

The Home Insurance struggle
If your house or flat fits nicely into all the requirements set out by insurance providers, then a home insurance policy won’t be difficult to come across. But it only takes one of a number different property issues to chase away any promising policies. This can include:

Flooding – Insurance companies will often check your postcode to see whether you live in an area prone to flooding. The summer floods of 2013 have made it very difficult for many to secure home insurance.

Subsidence – Underpinning a property that suffers from subsidence means a property can come with an architect’s guarantee for a set period, but this is only a temporary solution to a pre-existing and permanent problem. (more…)

Pokémon Go Is Distracting UK Drivers

Since its introduction in July, police have noticed motorists playing Pokémon Go while driving, despite it being illegal and highly dangerous. Motorists face a £100 fine and three points on their licence for using a hand-held phone while driving—a behaviour that has been compared to drink driving.

The popular game involves players using their mobile phones to capture and train creatures known as ‘Pokémon’. A Voucher Codes Pro poll found that 35 per cent of respondents admitted to playing the game whilst driving.

Two specific distracted driving incidents stemming from Pokémon Go happened within a day of each other in Essex. One involved a man playing the game while driving along West Thurrock Way in Grays. The second incident involved a teenage girl stopped in Basildon because she was driving at slow speeds with no lights on. The driver and three other passengers said they had been looking for Pokéstops—places where players can stock up on essential game items. (more…)

How Safe Is Cloud Computing?

On the one hand, businesses are being warned that by not embracing technology, they are rendering themselves irrelevant to the hundreds, thousands or even millions of people who shop, research and review online. On the other, there’s barely a day goes by that there isn’t a news story issuing a stark warning about cyber security.

As the internet by nature opens businesses up to a greater cyber threat, it’s understandable that business owners would want to give cloud software, that which operates entirely online, a wide berth. Both with the promise of more flexibility, frequent useful additions and updates, lower costs in initial outlay and space saved, the pros of cloud computing seem to outweigh the cons of security.

The concern of loading sensitive data or important but confidential company information onto the internet is a valid one, as there have already been two hacks on prominent cloud software companies. But taking precautions of your own on top of the measures the software providers themselves are implementing can help you move past reservations around cloud software and allow your business to keep up with the latest developments in a way that’s feasible and affordable. (more…)

Insurance Act 2015: Explained

When did the Insurance Act come into force?
The Insurance Act 2015 came into force on the 12th of August 2016 and changes the way the law deals with the duty of disclosure for commercial insurance contracts. The purpose of the Act is to update the current law to reflect the way in which the insurance market has evolved in modern times with the aim being to achieve a fair and balanced regime between insurers and insureds.

What you need to do?
Under the Act, insurance contracts will still be based on good faith and you will have a duty to make a fair presentation of the risk to insurers which will include disclosure of:

  • Every material circumstance which as an insured you are expected to know or ought to know about  the risk for which you are seeking insurance; or
  • Sufficient information to put a prudent insurer on notice that it needs to make further enquiries to reveal those material circumstances.