The Ministry of Justice has announced that from 11th January 2025, the personal injury discount rate in England and Wales will increase from -0.25% to 0.5%. Legislation dictates that the rate must be reviewed again within the next five years.

Jon Dye, director of underwriting, motor at QBE Insurance, said: “We welcome the personal injury discount rate review and the move announced today to align the rate with more recent economic conditions and the rates recently announced by Scotland and Northern Ireland.

“Whilst this rate is still likely to result in some claimants being over compensated, this movement is positive news for consumers and business and will help negate the continued upward pressure on the cost of serious bodily injury claims, including increasing care cost at c+9-12%."

Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, added: “The Lord Chancellor has sensibly erred on the side of caution and in doing so makes it less likely that the 100% compensation principle will be broken. In resisting siren voices calling for a much higher rate, she has done the right thing by seriously injured people while also ensuring that costs to compensators are kept under control.”