It’s not been long since the summer budget was announced by the Conservative government, but we’re already starting to see some of the affects of this on the Insurance and financial industry. Below we’ve outlined some of the biggest Insurance Industry changes and how they could be affecting the average UK household and your wallet.
This tax will affect many kinds of insurance and aims to generate up to £1.75bn a year for the Treasury. Travel insurance especially will be hit hard with an even higher tax rate. The Treasury assumes this is justified as the cost of premiums has generally fallen for many British families and other EU countries already tax insurance premiums a lot higher. This fails to take into account the gender discrimination changes bought in 2012 which already saw prices rise for women across the country while men’s prices dropped or stayed level. The British Insurance Brokers Association has condemned this as a ‘stealth tax’ on British households. You can read more about these insurance industry changes here.
This tax increase will come into effect this November, so now is a good opportunity to look into getting or changing your Life Insurance, before premiums increase in price. Active Brokers are here to help you find the right price for the right insurance, we have in house specialist based in the UK ready to guide you through the process. Find out more about Life Insurance here, or contact us directly on 01245 850 150.
Great news for corporate businesses. They will indeed be paying a lower rate of tax by 2020. Hopefully this will boost the economy as Britain is more open to trade and do business overseas. This frees up some cash for business in the UK, and many have said this will make paying employees the living wage (see below) more feasible… but others disagree, saying that the majority of SMEs will struggle even with the tax cut. Read more about this story here.
Good news for you! This means that hopefully in the future you won’t be charged as much to use a Claims Management Company. The ABI released a statement: “Poorly regulated Claims Management Companies have been hiking up the cost of insurance for far too long. The Government is right to tackle this aggressively and ensure the system rewards customers who behave truthfully.” Read more about this story here.
Have a home worth £1million? Lucky you! Under the new budget you’ll be able to leave the property to your child or grandchild without paying any inheritance tax by 2020. The current system works like this: no inheritance tax is charged on the first £325,000 of an estate, after that the charge is a 40% tax. You can read more about this story here, as the MoneySavingExpert has a great explanation of where you will and won’t be charged inheritance tax.
From April 2017 those between 18 and 21 YOA will not be entitled to claim housing benefit if they are out of work. This does exclude those who are parents who support their children. This is just one cut in a long line of benefit changes the government has proposed in the summer budget. Universal Credit, for example, will have its tax credits and family benefits limited to the first two children only. Most working age benefits will be frozen for four years from 2016. Read more about this in the BBC coverage here, as it is the best source of information for financial and insurance industry changes brought on by the budget.
This sounds like good news… or is it? Starting with a raise to £7.20, the minimum wage will rise to £9 an hour by 2020. Sounds like a good idea, but considering how the minimum wage has been increasing each year, that slightly knocks down how we see this rise over the next few years. This also only applies to people age 25 and over, leaving a lot of the poorest, hard-working and in-need youthful people on the lower rate. While this does encourage employees to take on more younger workers, when you consider all the benefit cuts (especially the housing benefit cut which takes away the benefit completely for those under 21) this national living wage increase does very little to help these people who have already felt the loss of benefits they needed. Read more about benefit cuts and the budget here.