The aim of this work is to study hot carrier degradation starting from microscopic mechanisms of defect generation and its effects on noise behaviour of scaled strained-Si MOSFETs. As device dimensions decrease, hot carrier effects, which are mainly due to the presence of a high electric field inside the device, are becoming a major device/circuit design concern. Studies of hot carrier degradation in high-mobility SiGe channel MOSFETs, in which a more severe degradation is expected due to the smaller bandgap compared to Si, are highly essential. A comprehensive model for hot carrier degradation has been used in simulation to capture the physical picture behind these detrimental effects. In this work, hot carrier degradation modelling issues have been carefully analysed and a comprehensive physics-based hot carrier degradation simulation study has been taken up. Peculiarities of the defect generation kinetics as well as their impact on degradation are discussed. We present the results of our studies on the hot carrier degradation in novel high-mobility SiGe/strained-Si channel MOSFETs and its effects on the low-frequency noise. It is shown due to hot carrier degradation, the hole mobility is degraded by about 40% after stressing. A twofold degradation in drain current is also observed.