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Prepare now to beat unisex rates


A new European ruling on gender discrimination will affect us all:


 Women’s car insurance premiums to rise  Men’s annuity rates to fall


 Review your finances now to beat unisex rates


Gavin Jones, Chartered


Financial Planner


In March, the European Court of Justice ruled that, under sex discrimination laws, gender can no longer be used as a risk factor to calculate annuity rates and insurance premiums.


This means the insurance world is facing up to a big change in the way it conducts business – currently, gender is a fundamental consideration for insurance companies when calculating how much to charge, but from 21 December 2012, providers will no longer be allowed to use gender as a risk factor.


This will affect everyone in one way or another and it could be prudent to act now: It is well known that car insurance costs less for women than for men, especially for young drivers where this difference can be as high as 50%, and this will have to be equalised in due course to comply with the ruling. This will inevitably see the cost of insurance for women rise but the amount of reduction – if any – applied to premiums for men is debatable.


The motor insurance has grabbed the headlines, but it is the implications on other areas that could be even more significant.


At present, men receive a considerably higher pension annuity rate than a woman at a given age to reflect the fact that statistically they have a lower life expectancy.


But as a result of this ruling, annuity rates will have to change too. Anyone considering purchasing a pension annuity will see a change in the rate that they are offered. If or when this will happen ahead of December 2012 is not yet known, but it is likely that men will have a reduced annuity rate.


Other areas that will be affected include life insurance, private health insurance and private medical insurance, and given that most of us have some exposure to at least one of these products it is clear to see the major implication that this ruling will have.


Although the changes do not legally come into effect until December 2012, insurance companies may change their practices sooner, and it is best to be prepared.


Some commentators have argued that a ‘domino effect’ could occur once the first of the larger insurance companies move to unisex rates ahead of the deadline, although, due to competitive pressures it is unlikely that this will be this year.


However, what is known is that unisex rates and the consequences they will bring are now inevitable and depending on your circumstances, it may be in your interests to act now, for example to secure a potentially higher pension income or a lower rate for your life insurance to help protect your family.


Alternatively, you may need to save more for your retirement to get the income level that you are aiming for. A comprehensive review from an Old Mill Financial Planner can help you to ensure your financial goals are achieved.


To find out how the changes will affect you and what you can do to protect yourself, contact Gavin Jones on 01749 335038 or email


gavin.jones@oldmillgroup.co.uk.


“Although the changes do not legally come into effect until December 2012, insurance companies may change their practices sooner, and it is best to be prepared.”


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