Car insurance premiums have risen by as much as 58% over the past 12 months, and even with switching for a better deal, some Brits are facing staggeringly higher premiums to continue driving. Research by Uswitch car insurance has looked at the average car insurance premium across the UK, alongside the reported average salary to calculate the percentage of annual income that yearly car insurance premiums now make up on average.
According to data from the House of Commons Library, the average UK salary for the year-end 2022 was £33,280 and the latest figures for average car insurance premiums were £924. Therefore, on average car insurance premiums account for around 2.78% of Brits average salary.
However, this is a very different picture depending on age bracket and regional factors across the UK, with some premiums being nearly 22% of someone’s average salary for Britain’s youngest drivers.
Younger drivers often face some of the highest car insurance premiums, but of those driving without financial support (e.g. from parents or guardians) it is younger drivers that will be feeling the increase in premiums the most. UK government data states the average salary for 16-17-year-olds in 2022 was £11,902. whereas the latest car insurance premium from Q3 2023 for that age group was £2,613. Based on this, the average car insurance premium is 21.95% of their average earnings.
Despite having the highest average annual salary at nearly £40,000 per annum, drivers in London are still paying the most proportionally for their car insurance, with average car insurance premiums now priced higher than £1,500. Car insurance policies in London therefore comprise 3.78% of average annual salaries.
Coming in second was the West Midlands where, even though the average salary was lower at £31,891.60 annually, the average car insurance premium was still high at £1,139. Car insurance therefore comprised 3.57% of the average salary.
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At the other end of the scale, Scotland was the second cheapest when it came to car insurance in relation to annual earnings. The average car insurance premium was £688 in Scotland, compared to an average annual salary of £33,295.60, meaning insurance was 2.07% of average salary.
The Brits who pay the least in relation to salary for their car insurance live in the South West. With an average salary of £32,229.60 but a relatively low premium of £597 for the year, car insurance only accounted for 1.85% of their average salaries.
Leoni Moninska, Uswitch car insurance expert shares her thoughts on car insurance premiums: “Whilst car insurance has increased in price for the majority of people in the UK, it’s clear that the impact on people’s finances will vary greatly across the country. Younger drivers are feeling the greatest pinch, with car insurance premiums now accounting for more than 20% of their potential income on average.
“The average percentage of salary spent on car insurance for the UK is now 2.78%. The differences in salary and premiums mean that drivers in London, West Midlands and Yorkshire are paying more relatively for their insurance than other Brits from around the country.
“Whilst premiums are rising, it’s important to compare deals and policies when it’s time for renewal in order to see if there are potential savings or cheaper deals that you may be offered by your current insurance provider.”