- Motor insurance premiums for under 25 year olds risen by more than £15 in last month
- Under 25s paying £505 more on average than rest of UK drivers
- Young drivers premiums to rise £30 more due to increase in Insurance Premium Tax
A combination of a hike in the Insurance Premium Tax at the Summer Budget and rising motor premiums in June is making driving less affordable for under 25 years olds, finds comparethemarket.com.
According to its latest motor insurance premium data, prices for this age group have risen by £15.59 over the month of June. These young drivers now pay £505 more, on average, than all other groups for their car insurance.
Furthermore, comparethemarket.com has calculated that under 25 year old drivers will be paying roughly an extra £30 per year due to the 3.5% increase in the Insurance Premium Tax to be implemented in November 2015, as announced in July by the Chancellor. This age group is excluded from the new living wage requirements, so their costs will rise whilst those on the lowest income, may not see an increase in their pay packets.
Simon McCulloch, Director of Insurance, comparethemarket.com, said: “Times are tough for young drivers. Under 25 year olds are already paying far more than all other age groups for their car insurance, with costs making a steep rise over the last month. What’s more, young drivers are going to be the worst hit by the increase in insurance tax – potentially seeing another £30 added to their bill.
“The Summer Budget has delivered a double-whammy for the 18-25 age group, as they will be exempt from the new living wage obligations and paying higher premiums, making it even more difficult to pay the bigger bills. At a time when young people are falling out of love with driving due to the rising cost of insurance (according to the Independent Transport Commission), the Government needs to consider additional ways of supporting young people because these latest changes are making driving even more unaffordable for the motorists of tomorrow.”
All data is sourced from comparethemarket.com.
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