The Ogden rate, also known as the personal injury discount rate, is the percentage used to adjust lump-sum compensation awards in medical negligence and personal injury claims for the investment return a claimant is assumed to earn on their payout. As of 11 January 2025, the rate for England and Wales is +0.5%, up from -0.25% previously. This change has a direct and significant effect on how much compensation claimants receive for future losses in serious medical negligence cases.
If you or a family member are pursuing a medical negligence claim involving long-term care needs, loss of earnings, or ongoing treatment costs, understanding how the Ogden rate works is essential to understanding what your claim might actually be worth. At Thompson & Co Solicitors, we explain this calculation clearly to every client so there are no surprises when it comes to settlement figures.
What Is the Ogden Rate?
The Ogden rate is a single percentage figure set by the Lord Chancellor, currently Shabana Mahmood, that courts and solicitors use to calculate the present-day value of compensation for losses a claimant will incur in the future. It gets its name from the Ogden Tables, a set of actuarial tables published by the Government Actuary’s Department and used throughout the UK legal system to convert annual future losses into a single lump-sum figure.
The logic behind the rate is straightforward in principle, even if the calculation itself is more technical. When a court awards compensation for a loss that will continue for years, such as the cost of a lifetime of care following a birth injury, or loss of earnings after a botched surgery leaves someone unable to work, it doesn’t hand over that money year by year. Instead, it awards a single lump sum today that is intended to cover the whole future loss. Because that lump sum can be invested and will (in theory) earn a return over time, the amount is adjusted, or discounted, to account for that assumed investment growth. The discount rate is the percentage used to make that adjustment.
Why the Ogden Rate Matters for Medical Negligence Claims
Medical negligence cases often involve the most severe and long-lasting injuries seen in personal injury law, including birth injuries causing cerebral palsy, brain injuries from delayed diagnosis, and injuries resulting in lifelong care needs. These are exactly the kinds of cases where future loss calculations make up the largest part of the compensation award, which means the Ogden rate has an outsized effect on medical negligence settlements compared with more minor personal injury claims.
A higher discount rate reduces the multiplier applied to future losses, which lowers the final lump sum a claimant receives for long-term care, loss of earnings, or ongoing medical costs. Conversely, a lower or negative discount rate increases the multiplier and therefore increases the payout, on the assumption that a claimant will struggle to generate meaningful investment returns from a lump sum in a low-interest environment.
How the multiplier changes with the discount rate
Using the Ogden Tables, a five-year future loss multiplier fell from 5.03 under the previous -0.25% rate to 4.94 under the new +0.5% rate. While that might look like a small difference, the effect compounds significantly over longer periods and larger annual losses. For example, a hypothetical claim involving ÂŁ200,000 per year in future losses over 35 years saw its total value drop by roughly ÂŁ892,000 simply because of the change in the discount rate, with no change at all to the severity of the injury or the facts of the case.
This example illustrates why the Ogden rate is far more than a technical footnote. For claimants with catastrophic injuries needing decades of specialist care, a shift of even half a percentage point in the discount rate can mean a difference of hundreds of thousands of pounds in the final settlement.
Timeline of the Ogden Rate in England and Wales
| Period | Discount Rate | Effect |
| Pre-2017 | 2.5% | Higher rate, smaller lump sums for future losses |
| 2017 to January 2025 | -0.25% | Negative rate, larger lump sums, reflecting low investment returns |
| From 11 January 2025 | +0.5% | Rate increased, reducing multipliers and lump sums compared with the previous period |
The rate has moved substantially over the past decade, reflecting changing assumptions about investment returns available to claimants and ongoing debate about how to balance fair compensation against the sustainability of NHS and insurer funding.
Why the rate changed in 2025
The move from -0.25% to +0.5% was intended, in part, to redirect public funds. Because the NHS is the defendant in the majority of high-value medical negligence claims through NHS Resolution, a discount rate that increases assumed investment returns for claimants directly reduces the size of lump-sum payouts the NHS has to fund, freeing up money that can, in theory, be redirected elsewhere within the health service.
This is a controversial point for claimants and their solicitors, since the practical effect is that people who have suffered life-changing injuries due to medical negligence now receive smaller lump sums for exactly the same level of harm than they would have received before January 2025.
How the Ogden Rate Is Applied: Step-by-Step
- Identify the future losses. A solicitor and, where necessary, medical and financial experts assess the annual cost of future care, lost earnings, therapy, equipment, and other ongoing needs arising from the negligence.
- Determine the claimant’s life expectancy or loss period. This is based on medical evidence and statistical life tables, adjusted for the claimant’s specific condition and prognosis.
- Select the relevant Ogden Table. Different tables apply depending on whether the loss is for life, for a fixed term, or adjusted for retirement age and contingencies other than mortality.
- Apply the current discount rate. The current +0.5% rate is applied to calculate the appropriate multiplier from the Ogden Tables.
- Multiply annual loss by the multiplier. The annual future loss figure is multiplied by the relevant multiplier to produce the lump-sum value for that head of loss.
- Combine all heads of loss. Future loss of earnings, cost of care, cost of equipment, and other heads of claim are calculated separately and combined with past losses and general damages to reach a total settlement figure.
- Negotiate or litigate the final figure. The defendant (often NHS Resolution or its representatives) will typically challenge assumptions about life expectancy, care costs, or future needs, meaning the final settlement can differ from the initial calculation.
Regional Differences: England, Wales, Scotland, and Northern Ireland
Scotland and Northern Ireland each set their own discount rate independently of England and Wales, though in the most recent review both jurisdictions aligned their rate at +0.5% as well. This means that, for the time being, claimants across the UK are working from broadly the same discount rate, although the underlying legislation and review timetables differ by jurisdiction, and future reviews could see the rates diverge again.
Common Misconceptions About the Ogden Rate
- “The Ogden rate only affects the biggest claims.” While its impact is most visible in catastrophic injury cases, any claim involving a meaningful future loss element, such as ongoing physiotherapy or a period of reduced earning capacity, is affected to some degree.
- “A higher discount rate is always bad for claimants.” It reduces lump-sum payouts, but the theory behind it is that claimants are assumed to earn investment returns that make up some of the difference over time. Whether that assumption plays out in practice for any individual claimant is a separate question.
- “The Ogden rate is fixed permanently.” It is reviewed periodically, generally at least every five years, and has changed substantially over the past decade.
- “The discount rate is the same as an interest rate on savings.” It’s a legal and actuarial construct used specifically for compensation calculations, not a market interest rate you can compare directly to savings account returns.
- “Solicitors have no influence over how the rate is applied.” While solicitors cannot change the rate itself, they can influence assumptions about life expectancy, future care costs, and other variables that, combined with the rate, determine the final award.
Why This Matters When Choosing a Medical Negligence Solicitor
Because the Ogden rate calculation sits underneath every significant future loss claim, the way your solicitor builds your case around life expectancy, future care needs, and loss of earnings can make a substantial difference to your final settlement, even before the discount rate itself is applied. At Thompson & Co Solicitors, our medical negligence team works with independent medical and financial experts to build robust, well-evidenced future loss claims, ensuring that the Ogden calculation is applied to figures that fully and fairly reflect what you will actually need going forward.
Frequently Asked Questions
What is the current Ogden discount rate?
Plus 0.5% in England and Wales, effective from 11 January 2025.
What was the Ogden rate before 2025?
Minus 0.25%.
Why does the Ogden rate matter for medical negligence compensation?
It determines the multiplier used to convert annual future losses, such as care costs and lost earnings, into a single lump-sum payout, and it has the biggest impact on the highest-value, most serious claims.
Does a higher Ogden rate mean I’ll receive less compensation?
For claims involving future losses, yes, a higher rate reduces the multiplier and therefore lowers the lump sum awarded for those losses, though it doesn’t affect general damages for pain and suffering in the same way.
How is the Ogden rate set in Scotland and Northern Ireland?
Both jurisdictions set their own rate independently, though both currently align with England and Wales at plus 0.5%.
Who sets the Ogden discount rate?
The Lord Chancellor, currently Shabana Mahmood, sets the rate for England and Wales following statutory review and expert advice.
What are Ogden Tables used for?
They provide actuarial multipliers used by courts and solicitors to calculate lump-sum damages for future financial losses in personal injury and medical negligence claims.
Does the Ogden rate affect all medical negligence claims equally?
No, it has the greatest effect on claims with significant future loss elements, such as birth injury and brain injury cases requiring lifelong care, and much less effect on claims with minimal ongoing loss.
Can the Ogden rate change again in the future?
Yes, it is reviewed periodically and has changed several times over the past decade, so future reviews could increase or decrease the rate again.
Should I get independent legal advice before accepting a settlement based on the Ogden rate?
Yes, because assumptions about life expectancy, future care costs, and other variables can significantly affect the final figure, it’s important to have a solicitor scrutinise these assumptions before you accept any offer.
Speak to Thompson & Co Solicitors
If you or a family member are pursuing a medical negligence claim involving long-term care needs or loss of future earnings, our team can explain exactly how the Ogden rate will apply to your case and ensure your future loss claim is built on robust, well-evidenced figures.