Drivers from ethnic minority backgrounds are paying hundreds of pounds more for their car insurance compared to white motorist, according to Citizens Advice.

The charity analysed 18,000 car insurance costs in a year long investigation across England and Wales.

On average, people from ethnic minority backgrounds paid £250 a year more than white people – regardless of gender, age and income.

In discovering the “shocking trend” CA also found that postcodes where more than 50% of the population hail from ethnic minority backgrounds an “ethnicity penalty” of at least £280 a year was applied.

“For too long the impenetrable nature of insurance pricing has just been accepted, but a £280-a-year ethnicity penalty cannot be allowed to continue,” said Clare Moriarty, chief executive of Citizens Advice.

The Association of British Insurers (ABI) said insurers never use ethnicity as a factor when setting prices but it recognises that the charity’s report raises “an important public policy debate”.