The European ruling back in March 2011 determined that when it comes to assessing gender risk factors in Insurance and Pensions, men and women should be on an equal footing.
Not only will this have an impact on insurance premiums and annuity rates but it will now also affect women who are using Capped Drawdown when taking their Pension Benefits.
HMRC have announced that from 21 December 2012 the current men’s Government Actuary’s Department (GAD) tables can also be used by women. This means women will be able to take more income under Capped Drawdown. Men will be unaffected by the change on the Drawdown rates however we are expecting men’s annuity rates to worsen as a result of this ruling.
As a result of the change, it may be advisable for female clients to wait until the end of the year if they are looking to take drawdown income as the scope to take a larger income will be increased. Equally if male clients are considering an annuity purchase, as the rates are expected to reduce it may be worth looking into this sooner rather than later.
Any women already in drawdown will move onto the “gender neutral” rates based on these tables at their next review following this date.