• Young Drivers to be hit hardest by IPT increase - £40 bill increase as tax changes take effect on 1 November
  • Tax hike to leave consumers with a £1.8 billion bill increase across insurance products – the equivalent of £68 per household

The Chancellor’s 3.5% increase in Insurance Premium Tax, coming into effect on 1 November, is set to hit young drivers to the tune of over £40 per driver, per year. Young drivers already pay over 160% more for their car insurance than the average premium for age groups over 25.

comparethemarket.com also calculates that the 3.5% rise in IPT will hit consumers with an extra £68 a year, on average, across all insurance products affected by the tax.

The tax hike is set to have an impact across a wide range of products:

  • On average, a motorist over 25 will pay £15 more per year (some £25 less than the average increase to a driver under 25)
  • Home insurance will see an average rise of £4.30 across both buildings and contents insurance.
  • Motorbike owners are set to face an additional £8.50 on their annual insurance bill, on average
  • Van drivers face a £16 hike, to their motor insurance bills, on average

Simon McCulloch, Director of Insurance, comparethemarket.com: “According to our calculations, consumers’ wallets are set to feel about £1.8 billion lighter as a result of the Insurance Premium Tax rise taking effect this Sunday. There will be a disproportionately high impact on various groups of people, depending on what they need to insure and their risk profile – but the clearest example is young drivers. With their motor premiums already at hugely expensive levels, the danger is that it is becoming unaffordable for many young people to run a car and an extra £40 a year – which for many people would be about a month’s worth of petrol or would cover their MOT – will be a bitter pill to swallow.”


All data has been compiled by comparethemarket.com. The index is based on more than 2 million quotes

About comparethemarket.com

comparethemarket.com was launched in 2006 and has grown rapidly over the past nine years to become one of the UK’s leading price comparison websites. 

comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as, credit cards and loans.

comparethemarket.com actively selects its brand partners, working with the best and most trusted organisations to ensure quality service to consumers.

comparethemarket.com is a trading name of BISL Limited. BISL Limited is authorised and regulated by the Financial Conduct Authority. Registered Address: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS. Registered in England number 3231094.