IPT hike branded a tax on the prudent

THE higher rate of insurance premium tax (IPT) -- which applies to travel insurance and extended warranties -- is set to rise to 20 per cent from 17.5 per cent.

In addition to this, the standard rate -- which applies to most general insurance -- will rise to six per cent from five per cent.

The government faced a backlash last night as critics branded the hike a tax on the prudent.

The average car insurance policy will now see £18 a year go to the government on a premium of £300.