You are here: cherry > Press releases for July 2014 > Older travellers doubly penalised by punitive insurance premium tax, warns AllClear

14 July 2014

 

 

• Travel insurance provider slams punitive tax on elderly planning to travel abroad

 

• Anomaly of 20% Insurance Premium Tax should be abolished

 

SICK and older travellers aged 65 and over hoping to take a summer break this year are being doubly penalised through an anomaly in the tax system, according to AllClear, a leading specialist travel insurance provider.

                                                     

Older travellers, and those with pre-existing medical conditions, already pay a higher premium related to increased risk, but are also paying a further 20% in an insurance premium tax (IPT) - taking the average cost of a premium to more than £200*.

 

This is despite IPT on ‘general’ insurances of only 6% - an anomaly that AllClear chairman Mike Rutherford says the Government seems keen to ignore.

 

“Travellers regularly tell us that the cost of insurance for travelling abroad is already high, and that they are penalised simply because of their age or a medical condition,” said Rutherford.

 

“But whereas it is understandable that premiums are weighted according to risk, it is completely unfair that the elderly have to pay even more because of such a punitive and arbitrary tax.”

 

Even pre-existing conditions such as asthma can effect travel insurance costs and lead to high premiums. And there are concerns that the ISP will effect couples doubly if they are on separate policies.

 

AllClear is calling on the Government, and the Chancellor George Osborne, to re-think its position on IPT and its impact on the more vulnerable in society.

 

The tax was introduced to prevent a loophole being exploited by travel agents who used the commission payments on insurance to discount the overall cost of the holiday on which they were obliged to pay VAT, thereby reducing the total revenues to the Crown.

 

With a radical change in the way that consumers book holidays today, Mr. Rutherford does not see why such a high level of tax is still relevant:

 

“Retaining IPT on travel insurance at such a high level cannot be justified,” he says. “It is simply unfair, and it is about time the Government – who say they are on the side of the elderly and hard-working families – did something about it.”

 

AllClear is a specialist broker that provides cover to those who cannot find it elsewhere – specifically over 65s and those with pre-existing medical conditions.

 

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