Should Men be Buying Annuities Now?
The European Gender Directive which comes into force in December 21st will ban insurers from offering different rates to women and men. This will affect men as currently they have poorer life expectancy and hence they are currently offered a better annuity income. When the directive comes into force, pension providers will not be allowed to differentiate between women and men, and hence the favourable rate that men currently get will be no more.
Brokers are encouraging male clients to bring forward annuity purchases to avoid the projected fall in income when the directive comes into force.
This will also have an impact on women’s car insurance as they currently get favourable rates because their safety record is better than men. Again, this will not be allowable from December.
On the other hand it may be better for women to wait until then to buy an annuity as it may have the opposite effect on women. However it is likely that they will see less of a change than men! Some annuity providers are already stating that women should not rely on this happening, but are also advising that men will be affected.
The amount by which it will affect men is, understandably, uncertain at this time. The Treasury forecasts it could be as high as 13%, but suppliers are citing that this is “high” and the impact will be less, but nobody is saying by how much at this stage.
Watch this space….