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Insurance premium tax costing young drivers £165 a year

13th November 2017 Print

Young drivers are being disproportionately punished by the high level of insurance premium tax (IPT), making the cost of getting on road prohibitive to many 17 – 24-year olds, according to new research by Its own data shows that the tax is adding a massive £165 to young people’s annual premiums.

According to new research by, in 2017, the average amount levied by IPT for a young driver’s (aged 17-24)  motor policy was 148% higher than that of the average driver over the age of 24. £165.27 was the average cost of IPT for young drivers, compared to an average of £66.70 for all other age groups. 

IPT, which stands at 12% after doubling in the past three years, is priced into the overall premium that drivers are charged. This means that young drivers who face higher car insurance bills face disproportionate increases in the policy that they pay. Young drivers currently pay around £820 more per year for their car insurance than the average motor insurance premium for age groups over 25 years. is calling on the Government to exempt drivers under the age of 25 from having to pay insurance premium tax, in order to reduce prohibitively high insurance bills and ensure that getting on the road is affordable for the next generation of drivers.

John Miles, Head of Motor at, said: “The past three years have seen consistent rises in car insurance premiums for young people. One of the main drivers of this worrying trend is the repeated hiking of insurance premium tax which, having doubled, is making driving an impossible dream for some young people. As it is a flat rate of tax, the hikes in IPT have disproportionately impacted young people as they already pay much more for their car insurance.

“Driving is essential for many who are looking to secure and maintain jobs and forcing young people, who can afford it the least, to pay such high premiums is a hugely unfair. We believe that the Government should seriously look at an IPT exemption for drivers under the age of 25 to help them get on the road.”