UK Car Tax Changes for Older Drivers and Vehicle Owners from 2025

2025-02-28

Older drivers in the UK, particularly those aged 70 and above, are set to face significant changes to car tax rules from April 2025. The new Vehicle Excise Duty (VED) rates will see standard fees rise in line with Retail Price Index (RPI) inflation, increasing to £195 annually for all motorists, regardless of age. This marks a notable shift, as there will no longer be any age-based exemptions for VED fees. Elderly drivers with a diagnosed disability may still qualify for exemptions, but healthy pensioners will be required to pay the same rates as other road users.

The changes will also impact owners of older vehicles, particularly those registered before 2001, who will see their costs rise. For example, cars with engines above 1549cc will pay £360 annually, an increase of £15, while models below 1549cc will see charges rise from £210 to £220. Additionally, electric vehicles, which were previously exempt from VED, will now incur a £10 charge in their first year, moving to the standard rate thereafter. Hybrid vehicles will also lose their £10 annual discount.

The most significant increases will affect first-time owners of high-emission petrol and diesel vehicles, with those emitting over 255g/km of CO2 facing annual bills of up to £5,490, double the previous rate. These changes are part of the government’s efforts to incentivise the switch to electric vehicles and reduce reliance on fossil fuels. Drivers are advised to check their vehicle’s tax band and prepare for the upcoming adjustments when renewing their car tax policies from April 2025.

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