European Commission causes Annuity confusion

It has emerged that the European Commission’s ruling on gender pricing in Annuities will not apply to occupational pension schemes. The European Court of Justice ruled in March last year that insurers could not use gender as a factor when pricing their Annuities. Annuity rates The ban is due to come into effect from 21st December 2012 and initially it was thought that insurers would need to change the way in which they price their Annuities. Many experts predicted the ruling would lead to lower Annuity rates, particularly for men. An Annuity rates comparison shows that men currently tend to get a ...

A Euro ruling on 1st March could reduce Annuity rates immediately for men

The European Court of Justice (ECJ) is due to rule on 1st March whether the use of gender as a risk factor to rate policies is compatible with European human rights on gender discrimination. Annuity providers in the UK use a wide variety of factors when deciding on their Annuity rates, one of the most important of these is gender. Men have a shorter life expectancy than women and therefore tend to get higher Annuity rates. If the ECJ rule that a person’s gender cannot be used as a factor in Annuity pricing it will be illegal to do so and the decision may need to be implemented immediately by Annuity providers here in the UK. No one knows which way the ECJ will rule, however some Annuity providers have started to plan for a change. John Occleshaw, Managing Director of Individual Business at Canada Life says "We think there’s a strong possibility that the ECJ will say you can’t use gender to price annuities and it’s effective immediately".