Andy Watson, CEO Ageas UK, explains the business case:
“Removing IPT on telematics products would increase take up and promote safer driving among young people. It would reduce the number of serious road crashes – which cost the economy an average £400k each according to the Department for Transport.
As IPT is currently levied at 6% for motor insurance policies and the average telematics policy costs around £1,000 per annum, research shows scrapping IPT for under 25s would only cost HM Treasury £19.5m in the first year, with a projected cost of £199m over seven years. The estimated benefit over the same period would be £699m, leading to a £500m saving to the economy.
This demonstrates an excellent return of over three times the investment, but would also result in safer roads and cheaper motor premiums for young drivers. This is a modern solution that is available now for the Government to implement. BIBA and Ageas strongly believe this is the right course of action.”