Women aged 20 face 11% motor premium hike

Young women aged 20 could see their motor insurance premiums rise by as much as 11 per cent next year, new research has revealed.

On 21 December 2012, the use of gender in insurance pricing will be banned, following a decision taken in March by EU judges who ruled that basing insurance premiums on gender was unlawful.

Traditionally, women have received cheaper motor insurance premiums than men, as insurers have deemed them to be less of a risk behind the wheel.

From December 2012, this bias will no longer exist.

The ban on gender pricing affects insurance pricing across the board, including life insurance and annuities.

Car insurance premiums

This latest report, produced by independent consultant Oxera, looked at the effect recalculating premiums will have on both men and women.

In the report, Oxera estimated that young women drivers will be hardest hit.

Young women aged 20 are likely to see motor insurance premiums rise by 11 per cent or more on average.

Men of the same age can expect a drop in insurance costs.

Pension & life insurance changes

For pensions and life insurance the changes are also expected to be significant.

Men aged 65 could see a reduction in pension income from pension annuities of around 5 per cent or more on average.

Women aged 40 could see life insurance premiums rise by around 30 per cent or more on average.