Research on behalf of the Equal Opportunities Commission into the arguments for and against unisex annuities has led the Pensions Policy Institute to conclude there are no good reasons why such policy should not be implemented.
Fundamentally supporting this conclusion is the view “developments in annuity pricing are reducing the relevance of gender as a rating factor”.
The PPI actually goes further than the debate over annuity rates, suggesting those with smaller savings would benefit more from advice than better rates.
”Rather than introducing unisex rates it may be more beneficial to everyone, in particular those with smaller savings who are more likely to be women, to have access to better advice and a greater ability to shop around."
The heated arguments over rates are also irrelevant to many pensioners, the research suggests.
Less than a quarter of pensioners have an annuity. Of those, three times as many would see a lower income than a higher one if unisex rates were introduced, in part because spouses and widows reliant on their husband’s retirement income would be hit.
However, because of the relatively small proportion of total retirement income accounted for by annuities – especially for those on low incomes, who would receive most of their income from the state – “average gains and losses would be small”.
”Even if all private retirement income came from annuities, most pensioners’ incomes would change by significantly less than 10%,” the PPI says.IFAonline
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