Since 2016, the Personal Finance Research Centre (PFRC) at the University of Bristol has worked with organisations and programmes such as Fair By Design to measure different components of the ‘Poverty Premium’ – the extra costs that low-income households face when accessing essential goods and services. An ongoing focus of this research has been low-income households’ difficulties in accessing car insurance. While vehicle ownership is generally lower among poorer households (which itself can cause further poverty premiums ), those who do own a car may find themselves paying more for insurance than higher-income households. This can occur either because they are forced to pay in monthly instalments (rather than in a single annual lump-sum) or as a result of living in more deprived areas.

This briefing note includes analysis of over 1,000 insurance quotes, covering a range of different types of area and finds that those living in the most deprived areas could pay as much as 29-48% extra on their car insurance premiums (equivalent to £234-314).