What is the poverty premium in insurance?

Insurance products are essential to provide protection from financial loss and peace of mind for consumers. Despite being essential, low-income households face a number of barriers to accessing the insurance market. If low-income consumers can afford insurance, they are often hit with additional costs.

Car insurance

A car is often essential, for getting people to work, or enabling them  to visit loved ones, and it is often the only form of transport suitable for some disabled people, yet the poor are charged a premium.

People in less affluent areas are hit by a postcode penalty and can pay almost £335 more a year than others living in more affluent areas. If they pay monthly, this can mean an extra £122 or so on top, amounting to around £450 simply because they are poor, and seen as riskier and costlier to serve.

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What we're doing

We are working to address the barriers low income consumers face in the insurance market and to find solutions to ending the poverty premium. We are calling on regulator The Financial Conduct Authority to investigate how well the insurance market is meeting the needs of low-income consumers, including the premium charged to customers for paying monthly for their car insurance. We are also working with the industry to design solutions and engage government throughout the process.

News And Publications - Insurance

Find all our our evidence, reports and consultation findings

We launch our new payments film

Date published: 08/04/24

Watch the stories of Catherine, Zahada and Caroline, who all pay more because of the…

A plan to tackle the poverty premium and make markets work

Date published: 27/03/24

Read our report with Fabian Society on how the next government can reduce the poverty…

Time for action: car insurance poverty premium 

Date published: 16/01/24

Car insurance poverty premium costs people in poverty hundreds of pounds – it’s time for…

Priced out – Poor people giving up insurance due to ‘poverty premium’

Date published: 13/03/23

Over half (55%) of people in poverty are finding it difficult to pay for their…

Insurance and the poverty premium

Date published: 12/03/23

Read WPI Economics’ paper for the Barrow Cadbury Trust, on insurance and the poverty premium…

Insurance and the poverty premium – Report

Date published: 12/03/23

Read our report, in partnership with Social Market Foundation, showing low-income people are giving up…

Insurance and the poverty premium – Summary

Date published: 12/03/23

Read our summary, in partnership with Social Market Foundation, showing low-income people are giving up…

How to address the poverty premium in the insurance market

Date published: 02/02/23

People in poverty pay more for insurance, and this extra cost is hitting them harder…

The Cost of Living and Levelling Up

Date published: 22/06/22

Read our report on how much the poverty premium costs each parliamentary constituency.

Explore all news & publications

Real Stories

Our work is led by the voices of those who experience the poverty premium.

More real stories

Zahada’s Story: car insurance and the poverty premium

Date published: 15/05/24

Insurance and the poverty premium: Zahada’s Story

Caroline’s Story: Panel talk

Date published: 08/05/24

Real stories: Caroline Cawley speaks at Fabian Society event