Female annuity rates up after EU Gender Directive

11 January 2013

The EU Gender Directive - which came into force last month - has led to a rise in the annuity rates being paid to women.

Many financial commentators stated it was unclear what the impact on rates for females would be when the legislation was introduced by the European Union on December 21st.

But new research by Moneyfacts has found that women approaching retirement are likely have seen an uplift in the income they can expect to receive from an annuity in recent weeks.

Gender neutralisation

It was noted by the website that women have been shown to be the big winners of what has become known as 'gender neutralisation' and the average annual income payable on a £50,000 standard level without guarantee annuity for a woman aged 65 years old has increased from £2,542 to £2,617, which is a rise of close to three per cent.

But figures revealed by Moneyfacts showed that the move to unisex rates has seen the average annual income payable on a standard level without guarantee annuity for a man aged 65 drop by 2.7 per cent from £2,690 to £2,617.

Richard Eagling, editor of investment life and pensions for Moneyfacts, urged men to take their time to shop around for an annuity to make sure they get the best rates that are available to them and boost their retirement income by hundreds - if not thousands - of pounds.

"Obviously, women find themselves in a better position than before, but they should still also shop around as considerable differences can be apparent in the amount of income available from different insurers," he said.

Male rates

Depending on the scenario, male annuity rates were found by the site to have dropped by between 1.8 per cent and 2.7 per cent in the short time since the arrival of the EU Gender Directive in December 2012.

A report by Money Mail recently found some male annuity rates are now only one per cent lower than they were before the directive came into force last month.

Those wishing to find out more about annuities and their options for boosting their retirement income can contact the experts at Key Retirement Solutions for details.