Annuities rates are changing

Ban on annuity gender discrimination

Following a ruling on gender discrimination by the European Court of Justice (ECJ), the way that annuity rates are calculated has been changed.

This could affect how much you receive in retirement.

How are annuity rates changing?

In March 2011, the ECJ ruled that companies could no longer take gender into account when setting insurance premiums or annuity rates. The change came into effect on 21 December 2012.

What does this mean for annuity rates?

Annuity providers are no longer able to use gender when calculating annuity rates. Broadly this means that if a man and woman are the same age, share the same health conditions and live at the same address, an annuity provider has to offer them the same annuity rates.

What factors currently affect my annuity rate?

There are a number of factors that will affect the annuity rate you could receive. From economic factors like fund performance and global events like the Euro crisis to your own circumstances for example where you live, your health and lifestyle.

Also, depending on what type of pension and who it’s invested with there may be other factors that could affect your annuity rate. Your pension plan may have valuable guarantees that you would be opting out of. It’s worth checking the terms of your pension.

Should I buy an annuity now or wait?

It’s very difficult to predict whether annuity rates will be higher or lower.

As rates are based on a number of factors, there are a number of variables that are unforeseen.

The question of whether to wait will really come down to your personal situation and whether you need to take an income from your pension immediately. Otherwise, you may simply want to keep an eye on annuity rates. Whatever you decide to do it’s always good to seek advice.

Are there other ways to access my pension fund?

Taking an annuity isn’t the only way to take money from your pension fund. Depending on your circumstances, and the size of your pension pot, you could consider Income Drawdown. As this involves investments, you might want to seek advice.

Find out more about your pension income options

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