In the United Kingdom, car drivers and owners are paying and losing billions of pounds from government policy changes, which add up to their total monthly premium. Per reports of, UK-based car insurance thinks tanks, government changes to car insurance policies are costing Brits about £7.8 billion per year.


It is mandated by law that Brits have to pay Insurance Premium Tax (IPT) and additional personal injury rates on top of their premium rate. These expenses add at least £208 in the individual cost per month of auto insurance. IPT is imposed directly on the owner’s car insurance policy. The tax in 2015 is only at six percent as opposed to the 12 percent increase this year. The sudden increase in tax has added an additional cost of £118 per insurance policy. In the last five years, the average payment of each brit has risen significantly. In 2014 alone, it was only £551, which is £184 cheaper than the rate now of £735.

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Among the paying population in the United Kingdom, young drivers, usually aged 18 to 30, are still the most hit sector with an average premium cost of £1,281. Fifty-six percent of young drivers lamented about the increase, saying that the cost of running auto in the United Kingdom is an additional burden for them. Meanwhile, 49 percent said that because of financial assistance they receive from someone else the cost becomes bearable.

According to Dan Hutson, the head of the Motor Insurance of, the change in the cost is a demonstration of the impact of government charges on the car insurance industry. For Dutson, the rise in the IPT payment is the government’s way of raising easy money from British taxpayers. In 2014, the tax collection was only at £3 billion. It ballooned to £6.2 billion in 2015 and 2019, almost a 50% percent increase. The increase in tax collection is large because of the mandatory IPT payment, which adds burden to the car owners in the United Kingdom.

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