Annuity income has seen a significant improvement for women since the inception of the Gender Neutral Pricing directive, with men also seeing an increase, according to Avelo, now owned by IRESS.
Pre G-day, many feared that male annuity income would suffer from the new directive. However, annuity income has improved faster for women, for men it has increased significantly as a result of improving bond and gilt yields and competition in the marketplace heating up.
Women have seen average annuity income secured from a £50,000 purchase rise by 12%, while men have seen an 8% increase compared to pre G-day. In November 2012, a £50,000 purchase would secure a monthly income of £2,725 for women. On average, this increased to £3,053 in September 2013. For men, the same size purchase has seen an average income rise from £2,823 to £3,053 over the same time period.
The increase in annuity income is even more prevalent when looking at smokers. Pre G-Day, women smokers were receiving £3,041 a month increasing to £3,483 (up 15%) and men from £3,147 to £3,483 (up 11%) for a £50,000 annuity purchase. Women have seen the more significant increase in both smoker and non-smoker annuities since G-day, but men have also seen an improvement after the initial fears.
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