Quick answer: no-claims bonus in 2026
- Max NCD (5 yrs)
- 65%
- Typical UK cap on 5-yr NCD
- Years to peak
- 5
- Some reward 9+ yrs
- Step-back per claim
- 2 yrs
- Industry standard
- Protection cost
- ~10%
- Of premium, 4+ yrs required
- Max gap
- 2 yrs
- Without losing NCD
How no-claims discount actually works
For every consecutive 12-month period you hold a UK motor policy in your own name without making a fault claim, you earn one "year" of no-claims. That year is recorded by your insurer on the Claims and Underwriting Exchange (CUE), the central UK database shared by all FCA-authorised motor insurers. When you switch insurer, the new one asks for proof and applies a corresponding discount.
The discount is a percentage off the base price, applied at the end of all other multipliers. On a £560 average UK premium, 5 years of NCD at 65% is worth roughly £200 a year, but on a £1,500 young-driver premium it is worth nearly £550. The NCD is most valuable to the drivers paying the most.
Typical UK no-claims discount scale, 2026
| Years claim-free | Typical discount | Worth on £560 base |
|---|---|---|
| 1 year | 30% | £168 |
| 2 years | 40% | £224 |
| 3 years | 50% | £280 |
| 4 years | 60% | £336 |
| 5 years | 65% | £364 |
| 6 years | 67% | £375 |
| 7 years | 68% | £381 |
| 8 years | 70% | £392 |
| 9 years | 75% | £420 |
Blended industry scale (Money Facts, NimbleFins, MoneySupermarket). Individual insurers vary by ±5%.
Definition. The step-back is the reduction in NCD years after a fault claim. The industry standard is 2 years per fault claim: 5 years becomes 3, then 1 on the second claim within a 3-year window.
Claim or pay yourself? The NCD step-back calculator
Enter the repair cost, your current premium, your years of NCD, and your excess. The widget compares the claim payout (after excess) against the lost discount over the next 4 years, and tells you which option leaves more money in your pocket.
The claim
Net result, 4-year horizon
How it breaks down
- Claim payout (repair − excess)+
- Annual premium hit after step-back+ / yr
- Hit over rebuild years-
Is NCD protection worth paying for?
NCD protection is an add-on that lets you make one or two fault claims per policy year without the insurer reducing your discount. It costs roughly 5% to 15% of the base premium (often £25 to £75 a year) and is almost always restricted to drivers with 4+ years of NCD already in the bank.
When protection pays
- You have a long commute or high mileage that statistically raises claim risk;
- You have already had one fault claim in the last 5 years;
- You drive in a high-claim postcode;
- Your premium is high enough that the protection cost is small relative to the discount value.
When protection wastes money
- You have a clean record and no recent claims;
- Your premium is already low, the protected discount is worth less than the protection cost;
- You confuse it with "premium protection": NCD protection preserves the percentage, not the overall price. Insurers can still raise the base premium after a claim.
Insider rule. Protected NCD does not stop the insurer applying a "claims loading", an extra 10% to 25% on top of the base price for the next 3 to 5 years after any claim. Your discount percentage stays, but the overall renewal can still be £100 to £300 higher.
When to claim and when to pay yourself
Use the calculator for your exact numbers. As a rule of thumb:
Claim makes sense
- Repair cost more than 3x your excess plus your annual premium;
- Total loss or write-off;
- Third-party injury claim against you;
- Theft of the vehicle.
Pay yourself
- Cosmetic dent, bumper scuff, light cluster, typical repair £200 to £800;
- You are within £100 to £200 of break-even on the calculator;
- You have 1 or 2 years NCD only, the step-back wipes the discount entirely.
Whichever you choose, still report the incident to your insurer within 24 hours. Failing to notify is a breach of policy conditions. The other party has up to 6 years (5 in Scotland) to claim against you.
Keeping your NCD when you stop driving
Selling the car, moving overseas, switching to a company vehicle or just taking a year off all create a gap. Most UK insurers will honour your previous NCD if you take out a new policy within 2 years of the old one lapsing. A handful (Direct Line, LV=, NFU Mutual) extended that to 3 years from 2024 onwards.
Beyond the gap window, the NCD drops off entirely. Two cheap options preserve it:
- NCD preservation policy, a placeholder policy at minimum cover, often £30 to £80 a year;
- Named driver on a partner's policy, Aviva, LV=, Saga and Direct Line issue a "named driver NCD certificate" worth 1 to 2 years.