Gender rule

Sterlingtimes

According to the Daily Mail men will be required to pay between 5% and 10% extra for their annuities owing to the European Court ruling. The Daily Mail suggests that 5% is realistic.

This means that men have to subsidise women who are not their wives, i.e. 5% of your working life has gone to fund women.

If your man pension pot was £100,000, it is now only £95,000.

This is another aspect of courts and governments pecking away at pensions. If looks like a MAN TAX.

This makes drawdown far more attractive for me. It's like receiving a 5% bonus on your pension fund before you even start.

lisyloo

Isn't the obvious advice not to get an annuity?

kidmugsy

Anyone who's a true (and married) gentleman and therefore had planned on an annuity with a 100% widow's pension would presumably be effected much less?

Sterlingtimes

kidmugsy wrote: »

Anyone who's a true (and married) gentleman and therefore had planned on an annuity with a 100% widow's pension would presumably be effected much less?

That may be the case, but a husband and wife together may decide that for that portion of their pension investment they would prefer more money today than money tomorrow. It is not necessarily a matter of the ungentlemanly husband contriving to leave his wife short.

Annuities seem to be becoming far less attractive for men.

kidmugsy

Sorry if I seemed too light-hearted. I'm doing drawdown but am considering recommending to my wife that she buy an annuity in a year or two. That's presumably the sort of thing you meant?

JOHNGT

Difference will be nowhere near 5%. Compare the male rates and female rates today, they are only about 5% apart. Bear in mind that 80% of money buying annuities is male money and you might expect male rates to fall by no more than 2% or 3%.

Returns on the underlying annuity investments (long-dated bonds) can have a far bigger impact.

Beware of commentators quoted in The Mail who suggest men should buy now, before things get worse. They might be working for 'IFAs' that have their own annuity shop. In truth, they are not IFAs at all and their annuity service doesn't give real advice.

Go see a real IFA if in doubt.