Separate annuity rates for men and women will soon be a thing of the past, after the European Court of Justice (ECJ) ruled against gender discrimination.
The judgement, which will also affect car insurance premiums, is a result of a test case brought forward by Belgian consumer group Test-Achats.
It argued that existing rules which allowed insurance firms to price policies according to sex were in breach of European Union regulations that forbid discrimination based on gender.
In its ruling, the ECJ said: "Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination."
Member states of the EU will now have until 31 December 2012 to implement unisex premiums.
An annuity allows somebody to invest their pension pot into a fund that delivers a yearly income for life, providing a steady cash-flow in retirement years.
The move towards standardised annuities for men and women is tipped to lower rates available to males, with research from MGM Advantage suggesting that they could suffer a fall of 4.73%.
Rates are typically higher for men as their life expectancy is lower than that of women.
Reacting to the ruling, Hargreaves Lansdown said that the move towards unisex premiums would likely see rates for men become 'significantly worse', demand for alternatives to lifetimes annuity increase and rates becoming volatile over the next few months as insurers monitor their new business and adjust their pricing accordingly.
"This ruling is a seismic event which will fundamentally reshape the retirement landscape," said Tom McPhail, head of pensions research at Hargreaves Lansdown.
"It is now imperative that every investor shops around with their pension fund at retirement; if they don't they risk ending up with a homogenised standard–issue annuity which is almost certain to be a poor deal for them."
If you're approaching retirement, our annuity best buy charts are an ideal starting point when searching for the best annuity rates. An online annuity planner service, such as that offered by Premier Retirement Services, should also be considered.
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