UK drivers could see their vehicle insurance costs go up next year, following a rule change about how much insurers have to pay out in the event of someone suffering a serious or long-term injury in a road accident.

The Sun revealed that premiums are expected to increase by an average of £25 to £50 per year as a result of the alteration to the Ogden rate.

Although the government has reduced the rate from -0.75 per cent to -0.25 per cent, insurers were expecting a larger drop and therefore are likely to increase premiums to absorb the cost.

Director general for the Association of British Insurers (ABI) Huw Evans told the newspaper that the decision is “a bad outcome for insurance customers and taxpayers that will add costs rather than save customers money”.

The latest data from the ABI shows that average car insurance costs stand at £466 per year for UK motorists.

However, insurance premiums aren’t the only thing that is likely to increase. Fuel prices have been creeping up again and motorists are under increasing financial pressure. The RAC’s fuel watch doesn’t expect unleaded prices to fall from their current average of 128.35p per litre, although diesel prices are expected to come down slightly.

If you don’t use your car very often, you may find that it’s more cost effective to sell it and instead hire one when you require a vehicle to get you from A to B.

It also means you could look into van hire in Worthing if you’ve got larger items to transport, rather than having to struggle with fitting bulky things into your car.