Do you get interest on your compensation?
Quick Answer
Yes — and it is worth knowing, because one of the most common worries people have is that a slow claim is costing them money.
It usually is not. Interest exists precisely so that waiting does not leave you worse off.
Why interest is added
If you were off work in March and your claim settles two years later, you have been without that money for two years. The person who caused the accident has effectively had the use of it instead.
Interest corrects that. It is not a bonus and it is not a penalty for the other side dragging things out. It simply reflects the time you have been out of pocket.
What it is added to
Broadly, there are two parts to a Scottish compensation award, and interest works differently on each.
Your financial losses — lost earnings, treatment costs, travel, care. Interest normally runs from the date you actually lost the money. If you lost wages eighteen months ago, interest has been accruing on that for eighteen months.
Solatium — the compensation for the injury itself, your pain and suffering. Interest here is more limited, and typically runs on the part of that award relating to what you have already been through, rather than on the whole of it from day one.
Your solicitor works out the split. It is not something you need to calculate.
Do you have to ask for it?
No. Interest is claimed as part of the settlement, and any competent solicitor will include it without being prompted. It does not need to be a separate negotiation.
What is worth doing is asking to see how the settlement breaks down before you accept it. A figure on its own tells you nothing. A breakdown shows you what is solatium, what is financial loss, what interest has been added, and what is being deducted — and that is the only way to judge whether an offer is fair.
Does interest make it worth waiting?
Not on its own, and this is the part worth being straight about.
Interest compensates you for the delay. It does not make delay profitable, and it is rarely a reason to hold out for longer. A claim should settle when the medical position is clear enough to value it properly — not sooner, because you cannot value an injury that is still changing, and not later, because there is nothing to gain.
If a claim is dragging and you are struggling financially, the answer is usually not to wait it out. Ask about an interim payment instead — money released before the claim finishes.
What actually slows a claim down
Most of the time, it is one of three things:
- The medical picture is not settled. Valuing an injury before you know how it ends up means guessing, usually low.
- Liability is disputed. If the other side denies fault, that has to be resolved first.
- Evidence is outstanding — records, reports, employer documents.
None of those are fixed by waiting quietly. If you do not know which applies to your claim, ask. You are entitled to a straight answer about where it has got to and what is holding it up.
Frequently asked questions
Will I definitely get interest?
In most successful claims, yes. The amount depends on how long the claim took and what it was made up of.
How much is it?
It depends on the value of the claim, the split between financial loss and solatium, and how long the money has been outstanding. Your solicitor can give you a figure once the settlement is being worked out.
Do I pay tax on it?
Personal injury compensation is not generally taxed as income in the UK, and that treatment extends to the award as a whole. If your circumstances are unusual, ask an accountant rather than assuming.
Is interest the same as compensation for the delay itself?
No. Interest reflects being out of pocket. It is not a separate payment for frustration or inconvenience.
My claim has taken over a year. Is that normal?
For anything beyond a straightforward injury, yes. Serious claims often take longer because they cannot be valued until the medical position is stable. See how long a claim takes.
Sources
General information, not advice. How interest applies to your claim depends on its facts — ask your solicitor for the breakdown before you accept any offer.
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Last reviewed: by the Personal Injury Claims Scotland editorial team