EU Judges deal hammer blow to male pension annuities
EU Judges have now passed a gender ruling which means that insurers can now no longer discriminate on the basis of what sex a client is. Scratch the surface and it is easy to see why this is utter madness.
For pension annuities, a man would always be offered a better rate than a woman on the basis that statistically he will not live as long. However, this ruling means that now both sexes must be given equal weighting, this effectively means men’s pensions will be reduced in order to give women more on a like for like basis but without taking into account that she will receive payouts for longer.
Rochester International, the international pensions consultancy commented, “It now makes more sense than ever for those affected to think of arrangements such as QROPS ( Overseas recognised pension arrangements ).”
QROPS allow ex UK residents who have accumulated pensions still within UK based schemes to move to an HMRC approved scheme, normally within a safe offshore jurisdiction such as Guernsey or Isle of Man. These schemes do not force the taking of an annuity at any time and help avoid a potential 55% tax charge. It is likely the EU ruling is just the tip of the iceberg, predictions already include that Smokers should be given the same rates as non smokers when it comes to life insurance.
The recent ruling also applies to car insurance where conversely, Females who are traditionally lower risk than men, will have to pay higher premiums than they are used to in order to subsidise males who are statistically higher risk.