Insurance premium tax (IPT) receipts in the UK reached a record £7.6 billion for the 2024/25 financial year to date, according to the latest data. January 2025 alone saw £853 million collected, emphasising projections that this could be the highest revenue-generating year for IPT yet. Previous months also saw significant collections, with November 2024 reaching £1.2 billion and October 2024 bringing in £956 million.
The increase in tax receipts reflects a growing reliance on private healthcare options, with long NHS waiting lists prompting both individuals and employers to seek independent medical services. According to Cara Spinks, head of life and health at financial services consultancy Broadstone, the trend is a response to concerns over workforce inactivity due to long-term illness.
“With NHS waiting lists remaining well above pre-pandemic levels, individuals and employers are leaning more and more on independent healthcare services in order to protect themselves and their businesses from the risks of inactivity due to long-term sickness,” Spinks said.
Health cash plans and private medical insurance are among the products contributing to the increased IPT revenue, Spinks noted. These services offer quicker access to preventative and supportive treatments, which can reduce time spent in ill health by enabling early intervention and management of chronic conditions.
Broadstone has urged the government to reconsider IPT charges on health insurance products, arguing that they align with official healthcare priorities. The UK government’s NHS reform strategy, outlined in its Plan for Change, emphasises a shift from treatment to prevention. Spinks suggested that removing IPT from health-focused insurance products could support this goal by reducing NHS pressures, fostering a healthier workforce, and stimulating economic growth.
“Given that the government’s own Plan for Change for building an NHS Fit for the Future sets out ‘from sickness to prevention’ as one of its key reform priorities, we urge the government to seriously consider removing IPT from these health insurance products in order to support its own mission,” Spinks said.
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