11 August 2008
Prudential, the UK's largest provider of annuities, is to use
postcodes to assess pension incomes for customers.
The idea is that people in wealthier parts of the country are
likely to live longer than people living in poorer areas. The
longer you live, the more expensive it is for the insurance company
to pay out an annuity from your pension pot, so you'll be offered
less per year than someone who is not expected to be as
healthy.
The decision to use location, as well as gender, age and fund
size, could affect annual pension payments by up to 5%, and is
expected to have a big effect on the rest of the annuity
market.
Other providers are expected to follow this trend or lose out.
