Another external factor pushing down annuity rates is the last thing you need if you’re retiring over the next few months. For men planning to buy an annuity, however, that’s exactly what’s on the cards.
From 21 December this year, financial services companies will no longer be allowed to use gender as a factor when setting prices for products. The change arises from a 2011 ruling in the European Court of Justice and will affects areas including insurance and pensions. As it stands, men are offered more generous annuities than women because of their lower average life expectancy.
Experts believe that once gender discrimination is outlawed, annuity rates for men could fall by up to 13 per cent as pension providers equalise rates offered to men and women. Female rates are likely to stay the same. Existing pensions won’t be affected but those taken out from 21 December will be.