Over the years we have seen fluctuations in public spending and, in particular, on the NHS. Recently, a restricted spend in this area has caused many people to feel increasingly frustrated by the service that is being provided. As a result, more and more people are turning to private medical insurance, with UK private healthcare market set to grow 2.8% per year until 2025.
Private Medical Insurance (PMI) can carry a range of benefits such as faster consultations or treatments that are unavailable, or less quickly accessed, on the NHS.
Nevertheless, we often face resistance from our clients when we offer this service. Many are under the impression that PMI would be too costly and are often surprised when we tell them the price, with cover for a family starting from £40 per month. What’s more, cover often includes services, such as Cognitive Behavioural Therapy (CBT) and other mental health treatments, that many families already pay for every year.
Along with the core benefits the policy provides, many insurers now include added incentives. A current example of this includes AXA’s PPP healthcare, where clients are provided with a 50% discount on PureGym membership fees. Aviva also offer a 25% discount on a network of gyms. While, Vitality boast of many established partnerships that offer ‘rich benefits which make accessing a healthy lifestyle easier’ such as David Lloyd Clubs, Nuffield Health Fitness and Wellbeing, Weight Watcher, Lloyds Pharmacy and many more.
There may currently be incentives from insurers but there seems to be limited encouragement coming from the government. Currently, PMI is not subject to National Insurance Tax and following the 2017 Autumn Budget there will be no further rise to Insurance Premium Tax (IPT) which will remain at 12%. This is a step in the right direction. However, if the government were to introduce income and corporation tax relief for both employees and businesses respectively. I believe there would be a dramatic increase in take up in this insurance.
The approach of providing tax relief to increase take-up on a scheme is not new within the UK, with the introduction of the ‘automatic enrolment’ pension scheme which was rolled out in 2008. Since the scheme, there has been a significant rise, in those who have private pensions with 41.1 million now signed up (occupational pension schemes)*.
If the government continues to restrict spending on the NHS, it is vital that they help ease the demand on the service by providing people with a cost-effective and viable alternative. By easing pressure on demand, the NHS can continue to provide and sustain the excellent service it provides for the nation.
Managing Director of Pure Protect
*Source: Occupational Pension Schemes Survey, UK: 2017