Each of the UK’s separate jurisdictions (England & Wales, Scotland, and Northern Ireland) now applies a single personal injury discount rate (PIDR) of +0.5% following separate statutory reviews completed in 2024. It replaced different single rates put in place after the previous cycle of reviews.

PIDRs in the Channel Islands are however governed by different legislation. Reviews there have led to markedly different outcomes, the most recent being the announcement on 21 July 2026 of new multiple PIDRs in Guernsey, which will take effect from 14 August 2026. Three separate rates will apply.

The new PIDRs result from recommendations made to the States of Guernsey by an expert panel and on which consultation was undertaken in summer 2025. The panel concluded that separate rates were required to reflect differing inflationary pressures affecting distinct heads of future loss. 

The new PIDRs, which will be set out in regulations, will be:

• -0.5% for future losses that are subject to earnings inflation (e.g. loss of earnings claims)
• -0.75% for future losses subject to inflation in the cost of care (very often the largest part of an overall lump sum award).
• +1% for future losses subject to prices inflation (i.e. everything else)

The adoption of three separate rates represents a departure from the common law approach established in Helmot v Simon [2012] and under which two rates applied, distinguishing between earnings-related losses (including care) and non-earnings-related losses. It also contrasts with the position in Jersey, where two PIDRs apply depending on the duration of the losses being assessed.

The structure of the new Guernsey discount rates makes direct comparisons with claim valuations in England and Wales challenging, as the composition of future losses will vary significantly from case to case. Nevertheless, considering the principal heads of future loss in a series of hypothetical examples provides an indication of the differences that may arise. Illustrative multipliers are set out below.

Stepping back from the detail, the differing approaches to the PIDR adopted across the UK and the Channel Islands reflect different policy judgments regarding the balance between:

1. simplicity and ease of application; and
2. greater perceived accuracy in reflecting future economic conditions, albeit at the cost of increased complexity.

Notably, all three possible approaches considered by the Ministry of Justice during the most recent review in England and Wales - namely a single rate, different rates by duration of loss, and different rates by head of loss - will shortly be in operation somewhere within the British Isles.

With the new rates taking effect in August, insurers handling Guernsey claims should:

1. review case reserves in light of the new rates;
2. scrutinise carefully the composition of future-loss claims to ensure that each head of loss is matched to the appropriate PIDR; and
3. in new claims, consider whether there is a credible issue regarding the applicable law that may support the application of English law.