Drivers aged 65 and over in Northern Ireland paid 9.6% more in Q1 2026 when spreading motor insurance costs over monthly instalments rather than paying annually - tying with London as the highest regional markup for this age group anywhere in the UK, according to new data from CompareNI.com. The figure has fallen from 13.8% in 2024 and 11.6% in 2025, tracking a broader industry decline driven by FCA scrutiny of premium finance pricing. But for older Northern Ireland drivers, the gap has closed more slowly than in other regions - and for brokers serving them, that persistence has a specific regulatory dimension.
In 2024, over-65s in Northern Ireland paid an average annual premium of roughly £487 if they could manage the lump sum, against a monthly total of approximately £549 - a £62 difference at 13.8%, above the UK average of 12.5% for the same age group. By 2025 the UK average had narrowed to 10.4%; Northern Ireland still sat at 11.6%. By Q1 2026 the absolute gap had fallen to £47.30 - annual premium £489.80 against monthly total £537.10 - but the regional markup remained the joint highest in the UK.
The FCA's premium finance market study, which concluded in February 2026, found that average APRs across the industry fell from 23.3% in 2022 to 19.2% in 2026. The regulator estimated that reduction saves monthly policyholders roughly £157 million a year - £8 per typical motor policy and £3 per home policy. Northern Ireland has shared in that decline, with the average markup between monthly and annual payments dropping from 13.5% in 2024 to 9.6% in 2026 across all age groups.
The FCA did not impose APR caps, commission bans or mandatory zero-interest models, concluding those interventions would be disproportionate and could reduce access to insurance. Instead it said it would pursue firm-level supervisory action where fair value assessments fall short. For brokers, the absence of new rules is not a clean bill of health - it is a shift of scrutiny from market-wide rulemaking to individual firm accountability.
The study examined how brokers earn revenue from premium finance and whether those arrangements deliver fair value under Consumer Duty. The regulator found broker-distributed premium finance products carried APRs roughly three percentage points higher on average than products funded directly by insurers or intermediary lenders, and that intermediary brokers experienced a bad debt rate of 3% in 2023 - higher than credit cards at 1.9% and personal loans.
BIBA's regulation director David Sparkes has noted that under recourse arrangements brokers absorb around 80% of unrecovered bad debt from defaulting customers, arguing commission income must compensate for that risk. The FCA acknowledged elevated credit risk as a partial explanation but made clear that firms must demonstrate charges reflect genuine costs rather than inherited margins.
Ian Wilson, managing director at CompareNI.com, said the downward trend was welcome but insufficient. "Drivers in Northern Ireland, particularly older motorists, are still being hit hardest when they pay their car insurance bills monthly," he said. "Many over-65s have a limited income and may not be able to afford a single payment of hundreds of pounds. Older drivers in NI are already paying more for car insurance than almost anywhere else in the UK, so for them to also face higher costs when it comes to monthly payments is a double blow."
The premium finance markup sits on top of an already elevated base premium, and the structural reasons for that elevation are well-documented. Whiplash reforms introduced in England and Wales in May 2021 under the Civil Liability Act 2018 set fixed compensation tariffs for minor soft-tissue injuries - reforms that HM Treasury's March 2025 report found saved policyholders an estimated £15 per policy in the final reporting year. Those reforms do not apply in Northern Ireland. Motor injury claims in the region rose 26% between 2021 and 2024, according to Association of Personal Injury Lawyers data, while claims in England and Wales fell 20% over the same period. Higher personal injury costs, a smaller pool of willing insurers, more rural roads and a weaker road safety record all compound the pricing challenge.
South Antrim MP Robin Swann has called on Westminster and Stormont to act, proposing an online injury claims portal and FCA regulation of claims management companies in Northern Ireland, which currently operate outside the regulator's oversight.
CompareNI.com's survey data adds a consumer knowledge dimension: more than half of motorists surveyed - 51% - did not know how much extra they were being charged for paying monthly, and only 35% correctly identified the typical markup of 9-12%. Some 53% said they considered it unfair that those who cannot afford annual payment are charged more.
For brokers with Northern Ireland motor clients on monthly payment plans, the regulatory position is specific. Premium finance remains a legitimate revenue stream and an essential access product for customers who cannot pay annually. But the FCA expects firms to demonstrate that what they charge reflects the cost of providing the service - not simply what the market will bear. In Northern Ireland, where older clients on fixed incomes are paying more for both the underlying insurance and the credit that funds it, that fair value case is harder to make and will require more rigorous documentation than in regions where the structural premium inflation is lower.
Wilson advised brokers to check client details carefully at renewal, noting that errors in marital status or job title can inflate quotes, and that parking on a driveway, reducing annual mileage estimates and shopping around rather than accepting auto-renewal can all reduce the base premium on which finance charges are calculated.
