Millions of households and motorists will pay more after Chancellor George Osborne hiked insurance premium tax (IPT) by 0.5 of a percentage point in today's Budget.
The rise from 9.5% to 10%, which will come into effect on 1 October, is less than the 3 percentage point hike that had been widely predicted. But it follows a hike from 6.5% to 9.5% last November and is likely to mean a further rise in the cost of pet, car, mobile, contents, buildings and private medical insurance.
The Association of British Insurers (ABI) has warned that changes to IPT will affect over 26 million drivers and 20 million households. Osborne says he would ring-fence the extra money raised to pay for improved flood defences across the North of England.