IPT Revenues Continue to Rise, As Personal Responsibility is Punished by Taxation

Insurance Premium Tax is arguably one of the most regressive taxes in the UK, and there’s strong competition. Punishing those who comply with laws, or act responsibly and take out Life, Illness, Contents or Travel cover is plain rude, whilst those who refuse to work expect the taxpayer to bail them out of every emergency/unlucky event in their lives.

Here’s the word;

HMRC data shows that Insurance Premium Tax (IPT) has generated £6.8 billion in the first nine months of the 2025/26 financial year (Apr to Dec), with £43 million collected in December alone.

This places IPT revenues £115 million higher than the same period last year, when the first nine months of 2024/25 totaled £6.7 billion and ultimately delivered a record annual figure of £8.88 billion.

It comes after a new ABI report published recently found that insurers process record £4bn across individual and workplace health schemes in 2024 – up 13% compared to 2023 (£3.57bn). That is roughly £11 million paid out every single day across the year.

The Office for Budget Responsibility’s Autumn Budget projections suggest that IPT receipts for 2025/26 are on course to reach £8.97 billion, rising further to £10.1 billion by 2030/31 as underlying demand for health‑related insurance products continues to grow.

Commenting on the figures, Cara Spinks, Head of Life & Health at leading independent financial consultancy Broadstone, said: “With three months remaining in the financial year, December’s IPT intake reinforces that this tax shows no signs of easing as the year‑to‑date total climbs to £6.8 billion.

“Workplace health insurance claims continue to rise, and employers are increasingly turning to PMI and Health Cash Plans to manage the productivity drain caused by long‑term sickness and ongoing NHS access challenges.

“The UK’s persistent ill‑health burden is acting as a drag on economic growth, and employers are increasingly being left to shoulder the consequences. Health insurance products play a critical role in keeping people in work by enabling early intervention, diagnosis and preventative care – while also alleviating pressure on the NHS.

“With IPT continuing to generate record sums and acting as a barrier to wider uptake of these essential benefits, the Government needs to reassess the role of IPT on health insurance and consider an exemption to support workforce participation and NHS resilience. This would empower employers to provide the support needed to help deliver on the aims of the Keep Britain Working review and underpin the UK’s broader growth ambitions.”