Annuity rates are hitting the headlines again. This time the focus has moved away from the record low rates reported throughout recent months and on to the impact of the EU directive on Gender Equality.
Currently, men tend to benefit from higher annuity rates than women because of their lower life expectancy. In simple terms, this means annuity providers estimate that men will receive their annuity income; the income provided in exchange for their pension pot; for fewer years than women.
Men to lose out
This could all change though, as later this year the EU Directive comes into force, preventing any differences in annuity rates between men and women. Instead of boosting rates for women, a middle ground is likely to be reached which may unfortunately cause men to lose out. Although insurers have yet to confirm their rates, a man aged 65 is likely to get about £200 a year less, with women getting about £100 a year more. For men this will mean they get about £5,000 less over the course of a typical retirement compared to now.* The 21st December 2012 is currently D-day for men purchasing an annuity, with plans to make the EU Directive effective from this date.
Making the most of your annuity
Despite low rates and tumbling annuities for men, you do still have the power to make your pension work as hard as possible for you. Shopping around for your pension annuity, rather than accepting the rate given to you by your current provider, could see you add thousands of pounds to your annual income. Shopping around can be time consuming so let Key’s Annuity Service do all the hard work for you. We’ll search our panel of consistently competitive providers to find you a better annuity. And the best news of all? Our service is completely free to you, as we receive payment from your chosen provider. If you’re due to retire in the next three months, why not give us a call on 0800 331 7711 and see how much more we could get you? We’re here to help Monday – Friday, 9am – 5.30pm.
*The Telegraph, March 2012