New Discount Rate for Personal Injury Claims

On 27 February the Lord Chancellor announced that with effect from 20 March 2017 the Discount Rate in personal injury claims will be reduced from 2.5% to minus 0.75%.

This change may have a significant impact on the size of the lump sum compensation award receivable by Claimants.


A 40 year old male with a retirement age of 65 and suffering an annual loss of net earnings of say, £30,000 p.a.:

  Discount Rate 2.5% Discount Rate (0.75)
Earnings Multiplicand £30,000 £30,000
  x x
Multiplier (prior to contingencies) 18.09 26.52
  = =
Lump Sum £542,700 £795,600


The reduction to the Discount Rate therefore represents an increase of £252,900 to the lump sum receivable by the Claimant in respect of loss of earnings.

In addition, his life time multiplier will increase 26.52 to 55.66.

It is therefore clear that the impact on pension calculations may be considerable.

If you would like to discuss the impact of this change on any ongoing claims please do not hesitate to contact the Forensic Team on 01352 751368


Further information can be obtained at