Motorists could save £50 on average following compensation change, firm predicts

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. This change is good news for drivers as it will further intensify the competitiveness of the motor insurance market Mohammad Khan, PwC From January 11 2025 a new discount rate of 0.5% will come into force, following improvements to the investments landscape, after a previous rate of minus 0.25%. The move to a positive discount rate could help to ease some cost pressures on insurers, such as those providing motor cover, although rising cost pressures such as labour and raw materials remain. Actuaries from PwC have estimated that premiums could decrease by an average of £50, with the rate change helping to intensify competition in the motor insurance market. The move to a positive rate reflects the improved investment market conditions since the rate was last set five years ago Association of British Insurers spokesman A spokesman for the Association of British Insurers said the change is welcome, adding: “The move to a positive rate reflects the improved investment market conditions since the rate was last set five years ago.