Changes to UK pension legislation will see middle aged men lose out on retirement income.
A new ruling by European judges has decreed that annuity rates can no longer be calculated by gender.
Currently, men receive bigger annuity rates than women as they are generally expected to live shorter lives than females, and as such they receive more income from their pension pot. However, due to the new ruling, their annuity rates will be brought in line with women’s.
Experts have calculated that this will result in men losing around £300 of their retirement income, as their annual allowance will decrease.
The ruling has been met with general dismay, Darren Philip, a director at the National Association of Pension Funds, said: “We are disappointed with decision as it will lead to a worsening of people’s pension incomes. While it is right that annuity providers should not arbitrarily differentiate between men and women, the data shows that there is a clear difference between them when it comes to longevity.”
Ros Altmann, director general at Saga, said: “It is discrimination against UK pensioners as we are required to buy annuities.”
However, there is a solution. British expatriates are allowed to take out special pensions transfers such as QROPS, and these transfers cast away the necessity of purchasing an annuity. If you are interested in offshore pensions transfer speak to an IFA today.