IT’S G-Day this Friday. The day when EU law making begins to have a very direct impact on household finances.
Even as the thorny topic of EU membership occupies centre stage in the referendum debate, there’s a decent chance that your attitude towards Brussels is one of indifference, bordering perhaps on hostility.
When it comes to our cash, there certainly remains a perception that legislation drawn up in Europe is remote and peripheral.
That’s about to change. Friday, 21 December marks the implementation of new rules banning insurers from quoting men and women different insurance prices on the basis of their gender. It means millions of people will have to pay more for their insurance – thousands of pounds more, in some cases.
The measure will affect the cost of products including car, life and protection insurance, as well as annuities.
Women are set to be the biggest losers, although insurance costs will be going up across the board (due partly to insurance tax changes taking effect in January).
It all arises from a ruling last year in the European Court of Justice, which upheld a challenge to the exemption of insurers from European gender equality principles.
Women buying car and life insurance will be hit hardest, with experts predicting premium hikes of up to 25 per cent. That women are less likely to be involved in car accidents is backed up by statistical evidence, but that will be irrelevant from Friday.
A number of insurers have adopted gender neutral pricing already, and the early signs suggest that the 25 per cent prediction is about right. Some young female drivers face paying thousands of pounds more for car insurance, making it virtually unaffordable.
The good news for men is that car insurance premiums will come down, albeit only marginally. Life insurance costs will edge up though, because unisex pricing won’t be a meeting midway between the current male and female rates. Insurers won’t be missing this opportunity to fatten their profit margins.
The bad news for men is that pension incomes will shrink, under the gender-neutral regime.
Men currently get more generous annuities than women, reflecting lower life expectancy. Now they could plummet by more than 10 per cent.
Annuity rates are free-falling as it is, thanks largely to low gilt yields. Further falls will raise new questions over the value to men of using annuities to convert their pension pots into a retirement income.
European policymaking affects our finances in very real ways, and will do so increasingly over the coming years. Thousands of Scots will discover over the coming months exactly what it can mean for their money.