Power losses from motors and drives can decrease their efficiency. The development of devices with high efficiency is a necessity nowadays, with a view to reducing CO2 emissions. The application of new magnetic materials is one method for increasing the efficiency of motors, although prediction and calculation of the losses in the magnetic circuits of motors are also very important. To reduce the iron losses, iron powder composites are used here instead of Fe-Si laminated steel sheets, in a low-power switched reluctance motor (SRM), and a new method of determining the iron loss in the magnetic circuit is developed. Through the use of new materials in the motor, we can achieve a 19% decrease in the iron loss in comparison to a commercial motor. A comparison of the measurement results for our new method of iron loss prediction showed that the difference is approximately 20-26%, depending on the type of magnetic circuit used for the motor. The usage of soft magnetic composites rather than electrical steel sheets can decrease the loss in magnetic circuits. The results from our new method of determination of iron loss are in good agreement with results of measurements, meaning that it can be applied in a detailed analysis of SRMs. The application of soft magnetic composites in electromagnetic and electromechanical converters is a new method for lowering iron losses in new devices. The determination of such losses in SRMs is still challenging, and the proposed method broadens the state of the art in this area. The method developed here is based on motor current measurements, FEM calculations, and measurements of the magnetisation curves and iron loss for samples according to IEC standards. The results obtained in this work can be used by designers for the development of new kinds of SRMs.