Older drivers are among those “most impacted” by new 2025 car tax changes, according to leading experts. Elderly road users are expected to pay millions of pounds more in Vehicle Excise Duty (VED) rates as a result of widespread updates introduced earlier this year.
VED fees were overhauled in 2025 with rises in annual fees for almost every petrol, diesel and electric car owners introduced back in April. Labour’s plans more heavily affected highly polluting models with massive increases in first-year VED rates on petrol and diesel machines. The updates have led experts to warn that baby boomers are most at risk, with many road users in this demographic usually opting for internal combustion models instead of EVs.
Baby boomers are usually defined as people born post World War II, so generally between 1946 and 1964. It means experts believe the updates are likely to impact road users between the ages of 61 and 79 more than any other age range.
Go.Compare said: “Baby boomers will be the most impacted of any generation for the same reason. In total, it’s estimated that baby boomers will be taxed an extra £40.5 million as a result of the changes. Just 6% of baby boomers drive either a battery electric or hybrid electric car.”
In contrast, Gen Z, those born since 1997, are likely to only pay £11.3 million under the new fees. This is because this age group are much more inclined to purchase electric vehicles, which are charged at a much lower VED tax rate.
Despite this, experts warn no one has really escaped from increases in 2025 in a blow to cash-strapped road users across the country.
Tom Banks, car insurance expert at Go.Compare stressed that “some groups will be worse impacted by rising VED rates than others”. He added that this was mainly set to be driven by “the type of cars they tend to buy.”
Tom explained: “But crucially, the increased rates mean all new car buyers will pay more this year. To cut these costs, go for a low-emissions car at the showroom if you can, as that will place you in the cheaper tax bands. Or, consider getting a ‘nearly new’ vehicle instead. This will give you that new car feeling for a fraction of the price, and allow you to dodge the increased tax.”
