Annuities customers given advice
23 November 2012
The impending EU Gender Directive is going to affect annuity rates and those considering the purchase of such products may be unsure of what to do.
According to a report by Investors Chronicle, rates for men are expected to dip following the regulation change in December, but it is not yet known what the impact for women is going to be.
Men who are sure they want to buy an annuity may be better off completing their purchase ahead of the change, which comes into effect on December 21st.
The directive means annuity providers will no longer be able to use gender as a factor when calculating the rates they offer to their potential consumers.
"Uncertainty over future pricing is making it difficult for financial planners to advise on annuities, but the general advice is if you weren't planning on annuitizing within the next six months, don't make any attempts to beat the rush and get in at the current rates," said the report by the news provider.
It added that it is important not to forget to apply for an enhanced annuity, as about 70 per cent of customers are eligible for this type of product, which could boost their retirement income.
Speaking to an independent financial adviser will be able to provide guidance and tips on how to go about choosing the right sort of annuity for a person's needs, it was noted in the report.
While males were told it may be better for them to get their forms ahead of next month's deadline, the publication pointed out that the situation is a little more complicated for females.
"By waiting they could avoid the artificially low rates potentially caused by the current rush, but they do risk rates falling further due to low gilt yields," said the news provider.
Earlier in the month, the Association of British Insurers announced it is launching a consultation into the transparency of annuity rates, with the body's director of life, savings and protection Stephen Gay stating this is to make it easier for members of the public to shop around for the best annuity rates.
People wishing to find out more about annuities can get in touch with Key Retirement Solutions.