A new EU ruling could equalise the pension pots of men and women and the ruling could be enforced as early as March 2011. The advocate general is arguing that there is more to annuity rates than just gender.
Tom McPhail, head of pensions research at Hargreaves Lansdown, says if rates are equalised men could see their annuity rates slashed by between 5% and 10%. The ruling may even apply retrospectively to pensioners already drawing an income.
This ruling if enforced would be a big shock to the already poor annuity rates that are on offer. Current rates are the lowest they have been for decades and many retirees already see annuities as poor value for their accumulated pension funds.
Here at retirementsolutions.co.uk we asked Jennie Gray, independent financial adviser to comment on the likely outcome of the ruling, Jennie said, “If this ruling is enforced as we expect it will be then it will be very disappointing from an adviser point of view. We are already in a period where retirees see annuities as very poor value and this ruling will see retirees even more disappointed with the income they receive”
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