01 March 2011

Another raid on my future pension

Much of the excitement around today's European Court of Justice ruling in insurance premiums has focused on the effects on motor insurance policies.  Young male drivers are dramatically more likely to kill or injure themselves or others than young women, and currently their premiums reflect this fact.  From December 2012, this will be illegal, and on the face of it, women will have to cross-subsidise less safe male drivers.

At the other end of the age range, pension annuities for men currently cost less for the same annual income than those for women, because men have a lower life expectancy.  This ruling will mean that they have to pay more. At the moment, the less well (impaired lives) or the older annuity buyers receive more for the same pot of money, but this could be judged discriminatory too.  We have a whole profession dedicated to this calculation - actuaries - and they could now become an endangered species.  Or they could be employed to find crafty ways and cunning proxies for age, sex and state of health, to circumvent the ruling.

 The Gordon Brown raid on pensions dividend income, poor investment returns, the financial crisis, and now this new ruling, all conspire to reduce my future pension further and further.  Those lucky enough to have a public sector pension won't be affected.  I bet that applies to the ECJ justices.

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