GENDER BLENDER CAN BE WORSE FOR BOTH SEXES
If you are a woman who needs car insurance or a man who is thinking of retiring and drawing your pension then you have less than three months to get the best deal.
Because from 21 December insurers will have to obey a new ruling of the European Court which bans pricing insurance differently for men and women. When prices are equalised whichever sex gets the better deal now will find they have to pay more in future.
CAR INSURANCE
Currently women pay less to insure their
car than men do because women are safer drivers. But any new insurance written
from 21 December will have to average out the cost between them – putting up the
cost to women and bringing down the price to men. The Treasury estimates that
car insurance for women aged 17-25 will rise on average by 24%. But the
insurance premiums for men of the same age will fall by a lot less – around 9%
the Treasury says. So women – especially young women – should insure their car
before 21 December. It could be worthwhile even if the existing insurance has a
few weeks to run. But talk to your insurer about penalties for cancellation.
Men of course may find it worthwhile to wait until after 21 December to insure their vehicle. But remember every vehicle has to be insured even if it is not used unless it is formally off the road and a notice from DVLA has been obtained. So if your insurance is due before 21 December it will be difficult to postpone renewing unless you put your car off the road in a drive or garage, cancel your car tax and declare it off the road.
PENSION TIME
At the other end of the age scale the
problem is reversed. Men who want to
convert their pension pot into a pension get more per thousand pounds than
women. That is because women live longer so their pension has to be spread over
a longer life. The difference is only 4% or 5% so the change is likely to be
small. But from 21 December annuity rates have to be genderless and men could
see their pension offers fall slightly – perhaps £10 or so a year for every
£10,000 they have in their pot. So men should consider converting their pension
fund before 21 December. It could give them a higher income for life.
Women though may not find it worthwhile to defer claiming their pension until after 21 December when they might expect a higher rate. If you take your pension now you will get it for a couple of months longer and you will have to work out how long it will take to lose more than that by the lower pension you can expect after 21 December.
OTHER COVER
The new gender rules apply to other
insurance as well. Life and critical illness insurance will rise for women and
fall for men. But health insurance and income protection will be the other way
round falling in price for women but rising for men. So it may be worth women
buying life insurance and men buying health cover before 21 December. But only
if they were going to buy it anyway and can bring forward the purchase by a week
or two.
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