Based on insurance spend, senior citizens will bear 18% of tax hike
Pensioners face paying an extra £84m every year following the insurance premium tax (IPT) hike in last month’s Budget, according to official statistics.
Shadow chief secretary Liam Byrne revealed the figures, calculated by House of Commons Library researchers, during a Parliamentary debate on the Finance Bill last week.
Based on an estimate that pensioners account for 18% of all insurance spending, the library worked out that senior citizens would pay £84m of the annual £455m that the government expects to raise from the increase in IPT.
Byrne said: “Pensioners will pay that without any recompense in the form of extra pension credit or increased basic state pension.”
Responding to amendments designed to exempt medical and motor insurance from the planned increases, Exchequer minister David Gauke said the two lines accounted for £40m and £160m respectively of the £455m due to be delivered by the hike.