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VAT increase set to cost over 50s an extra £524 million pounds in 2010
2010 will see the over 50s contribute an extra £524 million thanks to the VAT increase imposed from 1 January 2010¹. The VAT rate returns to 17.5% from 15% and will be felt by consumers all over the UK, but today new research by over 50s insurer RIAS has calculated the huge financial contribution that will be made by the over 50s next year.
The over 50s are some of the UK’s biggest consumers, outspending the younger generations by almost 13% each week, equivalent to £21, with the majority of their £179 expenditure going to food, drink, eating out, entertainment and hobbies².
The RIAS research, conducted in conjunction with CEBR, found that over 50s will be spending £19 a week in VAT in 2010, compared with their 2009 bill of £18.52 per week.
The 21 million over 50s made a net fiscal contribution of £6.6 billion to the UK public finances in 2008, defying the public stereotype of over 50s as being a drain on the economy. The ‘Still Giving at 50’ report, launched by RIAS in September, highlights that today’s over 50s are active and substantial contributors to the UK economy.
Janet Connor, Managing Director at RIAS, comments: “While the 2.5% increase in VAT may not sound like a huge amount, over a year it really does add up and bolsters the already substantial contribution the over 50s make to the UK public purse.
There has been a longstanding public stereotype that the over 50s take more from society and the state than they put in. However, this is just not true, with people over 50 contributing millions to the economy, as well as the positive societal contribution they make through their life experiences, outlook and knowledge. They’re also more satisfied with their lives and they know what they want.”
For more information about the range of products RIAS offers, customers can contact RIAS on 0800 130 30 30, or online at www.rias.co.uk.
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For further information, please contact:
Jo Carr or Alex Kennedy at Seventy Seven PR on 020 7492 0977 or email rias@77pr.co.uk
Alternatively, contact Blair Catchpole, Consumer Communications Executive on 01202 254489 or email blair.catchpole@fortis-uk.com
Notes to Editors
¹ There are 21.0m over 50s in the UK who in 2008 spent on average £19 per week on VAT, at the rate of 17.5%. When the VAT rate was reduced to 15%, the over 50s saved £0.48 per week. This means that in 2010 they will contribute £24.96 a year extra in VAT (0.48 x 52), due to the rate increasing back to 17.5%. This amounts to £524,160,000 for the entire over 50s population.
² All figures, unless otherwise stated, are from ‘Still Giving at 50’ Report, commissioned by RIAS in August 2009.
About RIAS
RIAS was established in 1992 and is a specialist provider of insurance products for the over 50s age group.
Part of Fortis (Insurance UK), RIAS has a million motor, home and travel insurance customers, employs over 1,100 people across two UK sites, and is one of the UK’s fastest organically growing insurance intermediaries. RIAS negotiates with a panel of insurers to secure competitive, value for money products.
As a leading provider of award-winning personal and commercial lines insurance solutions in the UK, Fortis has a successful customer-centric strategy, founded on aligning its activities to how customers want to buy insurance, combined with delivering high quality products, manufactured at costs better than market norms.
Insuring in excess of 7 million customers and working with a range of partners, Fortis is recognised for delivering consistent and high-quality customer experiences. In 2008, its non-life profit before tax and interest was £76 million and its non-life GWP was £760 million.