Published: 24/02/2020
  • calls on the new Chancellor to scrap insurance premium tax (IPT) for young people under 25 years old

  • Research finds that drivers under 25 are disproportionately punished by tax on motor insurance

  • IPT adds an average of £134 to premiums for 17 to 24-year-olds compared to £77 for the rest of the UK

  • High cost of driving has made it unaffordable for many young people without parental support, impacting careers and social lives

18 February 2020 – is calling on the Government to scrap insurance premium tax (IPT) on policies for people aged 17 to 24, to allow them to stay on the road. Labelled the ‘youth mobility tax’ because of its disproportionate impact on young people, IPT adds an average of £134 to premiums for 17 to 24-year-olds and impacts their ability to stay on the road due to the high cost of driving.

IPT is levied on insurers by the Government as a proportion of a person’s premium, which is then passed on to consumers. However, as young people are considered higher risk drivers, they pay far more for car insurance than the rest of the UK resulting in a significantly higher amount of tax. It has been reported that the Government is considering clamping down on loopholes in Insurance Premium Tax to raise new revenues. However, the system remains unfair for young people who pay far more than the rest of the population.

According to research by, IPT, which currently stands at 12% of the cost of a premium, adds on average £134 to the policy of someone aged 17 to 24. This compares to an average of £77 for the rest of the UK. The cost of IPT gets progressively lower as you get older, as your premium generally reduces.

IPT adds to the already high cost of driving for young people. According to recent research, 83% of 17 to 24-year- olds said that their pay cheque is not high enough to cover the cost of driving. If motoring costs continue to rise, 63% of young people say that they will no longer be able to afford to run a car. The high cost of motoring has forced many to turn to their parents for help with nearly half (49%) receiving an average of £485 in financial support. has labelled it a ‘youth mobility tax’, as the expense of running a car is having a clear impact on many young people’s careers, social and family lives. More than half of young drivers (53%) say that, without parental contributions to motoring costs, their job would suffer. Over half (53%) of drivers aged 17 to 24 said that their social life would be impacted without parental contributions to their motoring costs, while 30% said they would see their family less without that support.

Dan Hutson, head of motor insurance, said:

“While the Government will claim that IPT is a tax on insurers, the reality is that it is a tax on young people. The cost of driving is already worryingly high for many people with 17 to 24-year-olds, paying an average of £1,250 for car insurance, £134 of which can be attributed to IPT. While there is uncertainty over the time of a budget under the new Chancellor and rumored clampdown on IPT loopholes, the Government has to explore exemption to this tax for young people to help them stay on the road and make the system fair.

“If you live in a major city, it is OK to get by without a car but for many around the UK, they rely on cars to get to and from work and to see friends and family. It is clearly unfair that young people, who can afford it least, shoulder the largest burden when it comes to insurance premium tax.”

Notes to editors:

About was launched in 2006 and has grown rapidly over the past fourteen years to become one of the UK’s leading price comparison websites. 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. actively works with its brand partners to help provide great services to customers. and are trading names of Compare The Market Limited. Compare The Market Limited is an insurance intermediary, which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 778488).