Budget 2016: Over-50s hit by 22 per cent rise in car insurance premiums - as George Osborne prepares to hike insurance tax again

Emma Haslett
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Older drivers' premiums have risen, while those for younger age groups have fallen (Source: Getty)

The over-50s have been hit by a 22 per cent rise in car insurance premiums since October 2013, new research has revealed - just as George Osborne is getting ready to hike tax on insurance policies again.

To be fair, the figures, by market researcher Consumer Intelligence, found the over-50s still pay the lowest insurance premiums, shelling out £298, compared with an average of £683.

But they have also been hit by the highest rises - while they're paying 22 per cent more than they were in 2013, younger drivers are paying 15 per cent less.

And in the year to February, premiums rose 15.3 per cent for older drivers, while for under-25s, the rise was 9.3 per cent (although they're paying an average of £1,600). The average rise was 13 per cent.

The research suggested telematics - the little black boxes which reward good driving - are helping to push premiums down for younger drivers.

The news comes as reports suggest the chancellor is preparing to raise the basic rate of insurance premium tax (IPT) from 9.5 per cent to 12.5 per cent.

Insurers have reacted angrily, with a spokesperson for the Association of British Insurers telling City A.M.: “Any rise in IPT would pile more financial pressure on the millions of families and firms who have done the right thing and taken out insurance.

“Protecting against life's uncertainties should not be penalised through higher insurance bills.”

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