Car insurance companies banned from 'loyalty penalty': Old customers can't be charged more

“It is likely that firms will no longer offer unsustainably low-priced deals to some customers.

“However, the FCA estimates that these measures will save consumers £4.2bn over 10 years, by removing the loyalty penalty and making the market work better.”

The new rules will also make it easier for consumers to cancel automatic renewals of their policies and force insurance firms to do more to consider how they offer fair value to customers.

Sheldon Mills, executive director for consumers and competition at the FCA, said: “These measures will put an end to the very high prices paid by many loyal customers.”