09 August 2012
HM Revenue and Customs (HMRC) has updated its guidance about
drawdown pensions. It tells providers to use the same rates for
women as for men to determine their maximum drawdown pension from
21st December 2012.
Male rates are higher than the rates for women; this means that
from 21st December 2012:
- women will be able to take a higher drawdown pension income
- men will see no change in the maximum drawdown pension they can
- drawdown providers can continue use the existing male rates,
but for more of their customers.
On 1st March 2011 the European Court ruled that insurers could
not use different premiums for men and women.
The government was disappointed with the judgement, which it
expects to have a largely negative impact on consumers. The
judgement is however binding in UK law and the government is
legally required to implement it.
Until it becomes clearer how annuity providers will apply the
judgement in practice, the maximum drawdown pension for both men
and women aged 23 and over should be calculated using the higher
male rates from 21st December 2012.
Click here to read more.