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Annuity rates rise for women after G-Day

Annuity rates rise for women after G-Day

Category: Annuities

Updated: 18/01/2013
First Published: 08/01/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Women approaching retirement have seen an uplift in the income they can expect to receive from an annuity, new research from Moneyfacts has revealed.

Following the introduction of new European rules banning insurers from discriminating between the sexes, women have been the big winners of what has become known as 'gender neutralisation'.

The passing of G-Day, on 21 December, means insurers must now charge the same prices to women and men for the same insurance products without distinction on the grounds of sex.

As a consequence, women, who pre G-Day could expect to receive a lower income than their equivalent male counterparts when purchasing an annuity, have seen the rates they can achieve rise.

According to Moneyfacts, the average annual income payable on a £50,000 standard level without guarantee annuity for a female aged 65 years old has increased by 2.9% from £2,542 to £2,617.

Across a range of scenarios, female rates improved by between 2.8% and 6.8%.

But while women find themselves in a better place than just a few weeks earlier, men have unfortunately seen the income on offer to them from an annuity drop.

The move to unisex rates has seen the average annual income payable on a standard level without guarantee annuity for a male aged 65 drop by 2.7% from £2,690 to £2,617.

Across different scenarios, male rates decreased by between 1.8% and 2.7%.

"The fall in male annuity rates means it is more important than ever that men shop around and approach different providers to find the best annuity rate available to them," said Richard Eagling, Editor of Investment Life & Pensions Moneyfacts.

"Obviously, women find themselves in a better position than before, but they should still also shop around as considerable differences can be apparent in the amount of income available from different insurers."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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