July 15, 2019

Discount Rate Announcement: New rate of -0.25% in England and Wales

-0.25% is a poor result. Yes, it’s better than the existing -0.75%, but it remains woefully inadequate. From the industry’s perspective, it tips the odds too much in favour of claimants at the expense of insurance-buying motorists and businesses, who will inevitably have to dig deeper for insurance costs.

The Lord Chancellor will today confirm that the Discount Rate in England and Wales will be set at -0.25% following the completion of the review process set out within the Civil Liability Act.

The new rate will take effect on 5 August 2019.

The next review will need to be concluded within a five-year review per the methodology set out within the Civil Liability Act.

A statement from the Lord Chancellor confirmed that the Government Actuary had provided analysis on a potential dual rate – similar to that recently established in Jersey - but  concluded that a single rate remains the most satisfactory method.

A full statement of reasons and an impact assessment regarding the decision are due to be published.

A further update setting out the implications of this decision will follow.