Drivers are paying record amounts for their car insurance and could face further increases, an industry body has warned.

The Association of British Insurers (ABI) found that between 2015 and 2016, all age groups except those aged under 21 saw increases in their average premium.

People in their late 50s and late 80s have experienced the highest annual rises of an average of £35.

The ABI found that the average price paid for comprehensive motor insurance across all ages is £462, a rise of 8% in the last year.

Drivers aged under 21 were found to be paying the highest premium with an average of £973.

However due to the younger group of drivers increasingly using "black box" technology, which tracks driving habits, insurance premiums fell by 2.3%.

The group said further waves of increases could take place between now and the start of next year, as insurers look to re-insure against large risks, such as catastrophic personal injury claims, during this period.

There will be a particular spike in reinsurance renewals around January 2018, it said.

The ABI said a decision announced by the Government in February to cut the personal injury discount rate "massively increases claims costs" and "will inevitably lead to higher premiums".

The rate helps to set compensation payouts when people suffer serious injuries, for example following a car crash.

When victims of life-changing injuries accept lump sum compensation, the rate is applied when calculating the payout, to take into account the potential returns that they could expect to receive from their money over time from investing the cash.

The ABI also said recent increases to insurance premium tax (IPT) will also have had an impact as premiums have pushed upwards.

The ABI's director general Huw Evans said while the ABI is pleased with Government plans to reform whiplash-style personal injury compensation, "the benefits could be wiped out if they don't defuse the discount rate bombshell".

A Ministry of Justice spokeswoman said: "We have consulted on whether there is a better or fairer framework for claimants and defendants in cases of serious personal injury. We will respond to the consultation in due course."