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October 5, 2012 6:23 pm
Men close to retirement face losing thousands of pounds in pension income if they don’t act in the next few weeks to secure an annuity before the advent of gender pricing, advisers have warned.
Males have traditionally enjoyed more generous annuity income than females because insurers have been able to take into account the fact that on average they don’t live as long.
But this will change from December 21, when insurers must apply a European Union-wide ban on the use of gender to price products, such as motor insurance and annuities.
“Men do get better annuity rates but men and women will soon be on an equal footing,” says Gemma Goodman, head of The Annuity Bureau, the specialist pension advisers.
“Men’s rates were about six per cent higher than women’s but this gap is narrowing and is likely to get narrower until December.”
Advisers caution that some insurers are switching to unisex rates well ahead of December 21. Prudential has declared it will not take gender into account for any applications made from November 12, five weeks ahead of the deadline, for instance.
Other insurers such as Legal & General, Just Retirement and Partnership and LV= this week declared they would switch to gender neutral rates on December 21.
“The sooner someone starts getting quotes the better will be the result,” said Bob Bullivant of Annuity Direct, the independent financial advisers.
““If you leave it too late you may either not get a proper scheme investigation or you may not get the absolute best rate. It can take up to three weeks for an annuity investigation to complete.”
Conversely women are being urged to consider holding off annuity purchase until after December 21, when rates for them may be higher.
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