Motor insurance premiums in the UK fell by 2.4% in January 2025, according to the latest General Insurance Price Index from Pearson Ham Group. 
This drop represents the largest monthly decline since May 2024 and brings the 12-month movement rate to -18.2%, as per the group’s findings. The median top-five price for motor insurance also dropped to £464, continuing the downward trend observed over the past ten months.
The steepest premium reductions were recorded among the youngest and oldest drivers, with rates for those under 26 and over 70 both declining by 2.9%. Regionally, the North West and London experienced the largest decreases at 2.9%, while Northern Ireland saw a smaller reduction of 1.9%.
Other regions also reported declines, with the North East falling by 2.6%, the East Midlands and West Midlands by 2.5%, and Scotland by 2.4%. The South East and South West recorded decreases of 2.1%, while Wales saw a 2.0% reduction.
The report confirms a continuation of the trend last seen in the third quarter of 2024, when the index showed a 4.4% drop in competitive prices for motor insurance. The steepest decline was recorded in August, with premiums decreasing by 1.9%.
Stephen Kennedy (pictured top right), director at Pearson Ham Group, noted that January marked the tenth consecutive month of falling motor insurance premiums, with the latest drop being the steepest since May of the previous year.
“The sharpest declines among younger and older drivers suggest insurers are recalibrating pricing, potentially in response to claims trends and competitive pressures, and could indicate some back versus front book strategies,” he said.
Regional variations, he added, reflect how local market dynamics continue to influence pricing.
Home insurance premiums also declined in January, falling by 0.9%. This marks the second consecutive month of reductions, suggesting a potential softening of the home insurance market.
Despite the recent declines, home insurance premiums remain 7% higher than they were at the same time last year and more than 50% higher than two years ago.
The median top-five price for home insurance fell to £221 in January. Price reductions were consistent across the UK, with Northern Ireland and Wales experiencing the largest declines at 1.1%.
Other regions also saw decreases, including the East of England and North East, both at 1.0%, while Scotland fell by 0.9%. Yorkshire and the Humber, the East Midlands, London, and the South West saw declines between 0.7% and 0.9%.
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