Navigating the NHS Crisis and Rising IHT: Why Now is the Time to Consider Private Medical Insurance (PMI)

January 27, 2025

The NHS has long been a cornerstone of the UK’s healthcare system, but the current crisis has left many people concerned about accessing timely medical treatment. With mounting pressures, including staffing shortages, growing waiting lists, and an aging population, even routine care can now involve significant delays.

Against this backdrop, the 2024 Budget has introduced changes that are further squeezing individuals and families financially, particularly those facing inheritance tax (IHT) challenges. The imposition of IHT on pensions, combined with the increased tax burden on businesses due to the limitation of Business Relief, has made financial planning even more critical. However, these challenges also create opportunities for proactive planning, especially for those exploring private medical insurance (PMI).

The NHS Crisis and Its Impact on Healthcare

The NHS crisis has brought home the importance of having alternatives when it comes to healthcare. For those with significant wealth or business interests, waiting for months or even years for treatment may not be an option. While the NHS does incredible work, the reality is that it may no longer meet the needs of everyone, particularly those seeking specialist care or timely intervention.

Rising IHT (Inheritance Tax) and the Financial Case for PMI

The 2024 Budget introduced several changes that increase the inheritance tax (IHT) burden:

  1. IHT on Pensions: Many people have relied on pensions as a tax-efficient way to pass on wealth. However, the introduction of IHT on pension pots could significantly reduce the amount left for loved ones.
  2. Increased IHT on Businesses: By limiting Business Relief, the government has made it more expensive for business owners to pass on their companies to the next generation.

For families facing these changes, every financial decision counts. While PMI is often seen as a luxury, it can also be a highly tax-efficient tool for those with IHT concerns. Why? Because the cost of PMI premiums effectively comes with a 40% discount in real terms if you’re subject to IHT. By using a portion of your estate to self-insure through private medical cover, you not only secure access to faster and potentially better healthcare, but you also reduce the taxable value of your estate.

What Is PMI and Why Consider It?

Private Medical Insurance (PMI) provides quicker access to healthcare, including specialist consultations, diagnostic tests, and elective treatments. It allows policyholders to avoid lengthy NHS waiting lists and receive care in private hospitals.

For those with existing plans, it’s worth reviewing whether they still meet your needs or whether a more cost-effective policy is available. And for those considering PMI for the first time, now may be the perfect time to explore your options.

How We Can Help

At Rowley Turton, we work with a trusted independent PMI specialist who can:

  • Arrange new PMI cover tailored to your individual or family needs.
  • Review existing PMI policies to ensure you’re getting the best value and coverage.

This approach ensures you receive unbiased advice, with access to the entire PMI market, so you can make informed decisions that align with your healthcare needs and financial goals.

Why Act Now?

The combination of NHS pressures and rising IHT makes now the ideal time to take action. By investing in PMI, you’re not only securing peace of mind for you and your loved ones but also taking a proactive step toward mitigating your IHT liabilities.

If you’d like to explore how PMI could fit into your financial and healthcare plans, get in touch with us today. We’d be delighted to introduce you to our independent PMI specialist to discuss your options.