MEP criticises annuities directive
24 December 2012
An EU directive is set to result in men receiving lower annuities, according to an MEP.
Conservative MEP Marina Yannakoudakis told the Fulham Chronicle that it is not right insurers will no longer be able to use gender as a factor when calculating annuity rates.
She explained this is going to have an impact on a wide range of products in the financial services market, from car insurance to annuities.
Ms Yannakoudakis, who is also the Conservative Women's Rights Spokesman in the European Parliament, said: "This ruling is gender equality for gender equality's sake. Only in the EU could penalising both women and men be seen as a kind of fairness."
She added that the directive, which came into effect last week (December 21st), "flies in the face of common sense", as well as the "overwhelming evidence" that women drivers represent a lower risk to insurers.
Men are also likely to see their annuity rates fall as a result of the ruling, but it is not yet known whether women will see the amount they receive go up at the same time.
"Women drivers who have not already changed their policies should shop around to ensure that they get the best deal," said the MEP.
Ms Yannakoudakis added some male pensioners who take out an annuity could be left as much as £10,000 worse off as a result of the arrival of the EU Gender Directive.
Last week, the change to legislation was defended by European Commission vice-president Viviane Reding, the European Union's (EU's) justice commissioner, who argued gender equality is a "fundamental right" in the EU.
"The European Commission has helped the industry to adapt during this period. The commission will monitor how the industry will implement these new rules in practice," added Ms Reding.
Philippe Guijarro, life insurance partner for PwC, previously noted that eight out of ten of the people who buy annuities are male
Those who want to find out more about how the changes are going to affect the annuities available to them can contact the specialist department at Key Retirement Solutions for details.