Men should seriously consider taking their pension income sooner rather than later.
(PRWEB UK) 29 September 2012
The rules on how annuity rates are calculated will change on the 21st of December.
According to a recent report, women’s incomes could rise, whilst male rates could fall.
Annuities are affected because they are based on life expectancy, therefore also taking gender into consideration.
The average life expectancy for women in the UK is 82, compared with 78 for men. Currently, this means that women get lower annuity rates than men because their pension fund will statistically have to last longer.
Following the new ruling, once gender is not considered, it is predicted that men’s annuity income will go down by around 2.5%, and that women’s income will rise by 2.5%.
Yet, ABI suggest that annuity rates may alter by over 2.5%, with a predicted 8% rise for women and a cut of 6% for men.
Scott Mullen of My Pension Expert the annuity specialists commented “Men should seriously consider taking their pension income sooner rather than later. A male retiring six months early would expect to reduce their pension income by around 1% but with a potential drop on the cards of 6% in December men might as well get on and take benefits now.”
The added bonus would also mean six months of income in the mean time and access to the tax free cash.
Women are recommended to buy an annuity after December 21 this year, as it is likely they will receive a higher income when the ruling is in place.
It is likely that any rises in rates will be gradual, as insurers and providers wait to monitor competition activity.
Enhanced annuities, which also consider your health, lifestyle and postcode, will be less affected by the gender ruling.
My Pension Expert is a company of Independent Financial Advisors who specialise in the at retirement market.