Home insurance premiums skyrocket but tax hikes hit over 50s hardest

24 August 2017

Households are being hit with substantial home insurance premium increases following recent government tax hikes, with prices for the over-50s rising fastest.

Analysis from insurance market research expert, Consumer Intelligence, reveals that home insurance premiums are rising at the fastest rate for three years. The average premium rose by 7% in the year to July, taking annual prices to £131.

But households over the age of 50 are worst affected with premiums rising on average by 7.6% compared to a 6.7% increase for the under 50s.

This follows news Moneywise reported in July, that motorists in their 50s have been hardest hit by car insurance premium increases.

The significant rises have been largely attributed to the government’s decision to hike Insurance Premium Tax (IPT) from 10% to 12% from 1 June. Recent increases in inflation have compounded this, along with the devaluing of the pound, which has made household repair materials more expensive.

Insurers reporting a rise in claims

John Blevins, Consumer Intelligence pricing expert, says: “The home insurance market is very competitive so it is unlikely prices will rise as quickly as in the car insurance market unless bad weather claims increase.

“But it is likely we will see a slow and steady rise in prices in line with inflation and the value of the pound.

“Several insurers are reporting a rise in claims for burst pipes which is not being attributed to one single factor. The boom in extensions and people attempting to fix their own plumbing problems are two of these factors.”

Regional variations

On a regional basis, Londoners experienced the biggest home insurance price hikes – with policies rising by around 9.2%. The East of England and East Midlands saw the slowest increase of 6.2%.

See the table below for the full regional variation in average premium costs.


Change in year to July 2017

Average premium (based on five cheapest premiums)




Yorkshire & Humber



North West






South East






West Midlands



North East



East Midlands






South West



GREAT BRITAIN                



Source: Consumer Intelligence, August 2017.


In reply to by anonymous_stub (not verified)

We have had several queries as to why the over 50s are hardest hit so asked Consumer Intelligence why.

Their response was that on average the over 50s age group:

• proportionally more homeowners than under 50s

• tend to own higher value properties that have benefited from higher house price inflation

• tend to own more high value items inside their homes 

These factors have led to higher increases in premiums than for those under the age of 50. 

Many thanks,

The Moneywise Team

In reply to by anonymous_stub (not verified)

you get what you pay for, you will find that out when you try to make a claim.

In reply to by anonymous_stub (not verified)

There doesn't seem to be any explanation in this report to support the headline that over 50s will be hardest hit. Please clarify.

In reply to by anonymous_stub (not verified)

I have two cars and my home insurance due for renewal in September and am collecting quotes. The first to come up is for my Ford Focus insured for the last year by Quotemehappy.com who are Aviva. the new premium is just over 2% more for the next year at £173.79 that is highly competitive as against Sainsbury's Bank at well over £600. No matter how many Nectar points they give won't make up the difference in a year.My basic home insurance with Direct Line is up by 15% but I will be having a word with them about this even though it only represents £17.14. They came good last year so worth a try.

In reply to by anonymous_stub (not verified)

Hi, I don't understand how you can say the IPT % increase (from 10% to 12%) is the reason for Insurance Premium increases affecting Over-50's more?ALL Insured people have to pay the same % of IPT.

In reply to by anonymous_stub (not verified)

What this does not explain is why the over 50s are being hit !!?Surely IPT is the same for everyone ?As usual the robbing insurance companies are targeting one group to rip off !!

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