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ECJ ruling a “seismic event” which will reshape retirement

Pension experts have branded the European Court of Justice gender ruling a “seismic event” that is set to reshape the retirement landscape.

The ECJ published its ruling today in the test case brought by Test-Achats, who claimed it was gender discrimination to charge men and women differently for products such as annuities and life insurance.

After an opinion statement in September by advocate general Juliane Kokott,  the final ruling has confirmed that gender cannot be used as a basis for calculating premiums with effect from December 21, 2012.

Hargreaves Lansdown head of pensions research Tom McPhail says: “This ruling is a seismic event which will fundamentally reshape the retirement landscape. It is now imperative that every investor shops around with their pension fund at retirement; if they do not they risk ending up with a homogenised standard–issue annuity which is almost certain to be a poor deal for them. 

“We will monitor the reaction of insurance companies and issue further information regarding annuity rate movements as it becomes available.”

Lifesearch senior policy adviser Matt Morris says: “This is a horrible mistake by the European Court. It is essential for insurers to use gender to calculate risk based on solid actuarial evidence and statistics. It is price differentiation, not discrimination, as it is not a decision that comes down to the whim of an individual.

“The consumer will now suffer. Prices will go up across the board as insurance companies try to build in the new risk. Women currently pay less than men for life insurance, but pay more for income protection.

“It is very unlikely premiums will meet in the middle because there will be huge costs to the industry of repricing and updating their systems so everyone will end up paying the higher rate. Everyone loses.”


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There are 32 comments at the moment, we would love to hear your opinion too.

  1. Calling this decision madness understates the enormity of the insanity we are facing.

    Where does this scheming end? Will they ban the use of medical information so that cancer sufferers are treated no different to others?

    Will they determine that we can only refer to clients as ‘citizen’.

    This type of sickness makes the RDR seem plausible!

  2. John Hutton-Attenborough 1st March 2011 at 11:24 am

    So once again a ruling which will effect the masses and end up costing more to receive back less!

  3. Political correctness gone mad yet again. Can anyone appeal?

  4. The Gutless Government should do what the Germans and the French would do–quietly ignore the ruling and wait for the EU to start chasing (thats probably about 2 years). Then you contest any ruling (another 2 years) Wait again for another decision whilst being as obstructive as possible (another 2 years) Wait for the fine (another 2 years) and by then the EU will have moved on to something else and we can forget about the whole load of rubbish.
    Job done!!!!

  5. Its about time that someone stood up to all this nonsense and put the ECJ right on this one. The term “discrimination” is being misused and misapplied.

    Are we a nation of whimps now then?

  6. This now leaves the door ajar for a consumer group to challenge insurers on the basis of ageism.

    What? A 50 year old has to pay more than a 25 year old for Life Assurance? – That’s terrible!!!

    This could well have a profound impact on the whole industry. The lunatics really have taken over the Brussels asylum.

  7. I’m surprised to read that women pay more than men do for life insurance. Is this a typo? Or have I misinterpreted its meaning?

  8. “Women currently pay more than men for life insurance, whereas men pay less for income protection.”

    I hope that’s just a typo… surely men currently pay more for life insurance because their life expectancy is shorter?

  9. Nice to see Matt Morris knows his insurance products. Women pay less for life insurance and more for income protection, not as he stated.
    To provide a bit of balance on what the EU has done well, we now get plugs on new electrical goods. Time to leave the EU perhaps?

  10. I think I just mourn the loss of ‘common sense’ in the world today in general.

    It seems to me that the Bureaucrats on this side of the channel and the Eureaucrats on the other, have all just ‘lost it’, and there are major decisions being made by those with absolutely no idea of the consequences of their ‘ramblings’

    Its a bit like some of the daft rulings that come out of touch judges in the legal system these days

    I despair as to where it will all end?

  11. I am just a simple IFA, but do we have any right of appeal? Do we have to comply with this ruling?
    Why have decade upon decade of statistical evidence been ignored?

    Is it soon going to be discriminatory to load a life assurance policy just because a someone smokes, drinks heavily, has numerous health conditions and also weighs 30st?

    I am convinced the world is going mad and future generations will look back on this era of political correctness and wonder how we let the authorities get away with it.

  12. A hard pill to swallow, but one could say that it will at least create a level playing field. Watch out for the future pricing of premiums and the discounts being offered for the healthier lifestyles. Price differentiation will clearly be more important and so it should be.

  13. I’m trying to shut out thoughts of actuaries out of work, pole dancing is not appropriate alternative employment for them, well not the males of course.

  14. What is the point of all these rules and regulations as I fail to see where consumers are getting a benefit.

    Trying to create a perfect “risk free” “unbiased” “gender neutral” non discriminating society is getting very very expensive.

    We are legislating to replace “common sense” and we are all going to end of much worse off, except of course, all those judges, unelected EU MP’s and regulators who can all walk away into the sunset with their heads held high whilst the rest of us pick up the pieces and pay the cost of their perfect world.

    If it carries on like this it won’t be too may years before we too end up trying to free our country from this madness and demonstrate in the streets.

    A “perfect world” costs a lot of money and we seem to have far too many do-gooders who are only too happy to campaign for every right under the sun and let everyone else pay as long as they don’t.

    I have read that Luxembourg get more EU money per head of population than any other EU country so if correct then that too is discrimination, you can go on and on even our taxes are discriminatory and do not fall fairly on everyone, especially Inheritance Tax. Married couples allowance could be considered discriminatory to single people etc. etc.

    Judges who probably do not even pay taxes in this country deciding what we can and cannot do.

  15. I want to be a risk assessor, now that limitless employment opportunities exist. Risk assessing has now passed undertaking as a solid occupation and in anycase is lots more fun.

    The salary and top ups, will bring a new race of better paid than commercial banks as industry and commerce is legally obliges to risk assess the mundane. If a fools paradise has not yet been achieved, this world controlled by fools is all but there.

    Long live the European Court the guardian saint of
    chartered risk assessers.

  16. We are grumbling about the inactivity of our Government and wishing that we had the “whatever” attitude of French/German Governments when they dislike a European ruling. But unfortunately these blog are not read by politicians.

    Instead what we need to do is ensure every MP is made aware of the huge negatve impact this will have on most households. If the Coalition are truly looking to save costs, then this surely is an easy win.

  17. Spot on Bob Perry. Soon there will be no differentiation based on gender, health, smoking habits, drug addiction, alcoholism, eating habits, dangerous sporting activities, occupational activities (our lads in Afghanistan will be able to get life assurance now) etc etc etc.

    I guess the mass of actuaries employed by life and protection companies will be looking for new jobs as they will soon be surplus to requirements. maybe even loss adjusters will be out of work because you can not descriminate from one claim to another.
    My ramblings just demonstrate the stupidity of this ill conceived decision and how much do these Eurocrats get paid for making every bodies life a complete and utter misery.

    Come on Mr Cameron, show us what you are made of and get us out of this rediculous organisation called the EEC!!!!

  18. Jeff (or possibly Jennifer) 1st March 2011 at 12:12 pm

    I am putting my “operation” on hold – I was only after cheaper life cover and car insurance – doesn’t seem worth it now…
    I will just look forward to my male annuity rate being higher when I get to retirement… oh, buxxer I presume that will be the same by the time I get there….I may as well go ahead with it then, there must be other advantages being a woman these days apart from cheaper car insurance…?
    Anyway, looks like there will be a lot of actuaries out of a job…. every cloud….!

  19. The answer is do not fight it, go with the flow. All you have to do is to build a risk based on DNA profile, if that differentiates between men and women that is purely coincidental.
    Just think out of the box!!

  20. Christian Patricot 1st March 2011 at 12:40 pm

    In the first place,the answer is indeed to do as John Lacy suggests and ignore / refuse to implement the rulling. Then to write to all MPs and then for the various IFA trade representatives and life assurance companies to work together to let the Gvt know why they will not implement this directive.
    What would the Gvt / FSA do? Ban all life assurance companies and IFAs?
    For me it is the same issue as the anger we feel towards the FSA / FSCS. As long as rule makers feel that they can dump onto us from a great height because we are a divided lot, they will continue to do so.
    It does not mean getting rid of regulators or out of the EEC, it means standing up for what is right for the consumers.

  21. Bonkers! Just hold two fingers up to these idiots, please

  22. For car Insurance only the UK can’t understand this one. In Holland, France and Germany (Australia, Kenya etc) it is the car that is insured, no matter who drives it. This issue about gender on car insurance doesn’t sell anywhere else than UK. It is time we read from the same hymn sheet.

    For annuity rates I am sure there is a point – ECJ got it wrong.

  23. If they can arrive at silly annuity rulings, so can i.
    How about `i voted UKIP so i`m exempt`!!??.

  24. The ABI and government stance was not to rock the boat because if we did it would make the decision a certainty.

    Well that non-vocal stance obviously didn’t help so do we use next 18 months to lobby government and use the industry to find another way of over turning the decision. We should leave no stone unturned to try and find a possible solution because it’s the wrong decision.

    I’m all for equality but this isn’t discrimination its just pricing and its common sense.

  25. And so the insanity continues and if I understand the consequences correctly women folk will lose with higher insurance premiums and lower pension income.

    For married couples annuity rates will fall due on the first life (normally male) to accomodate the equalisation requirements and the second life will lose again where they are the dependent on the death of the first life.

    Another well thought out legal ruling that Europe has the power to put in place but not the wit to limit the consequences. As if we don’t have enough problems in trying to bridge the savings and protection gap.

  26. Christian Patricot 1st March 2011 at 2:02 pm

    Would male’s annuity rates go down to equalise with women’s? If so, income for the same fund size would in future be lower? If you have less income, you spend less. You pay less tax. Neither of them is good for any economy and certainly not one trying to get as much money as possible to pay its debts back. If less income in retirement, possibly more demand to claim on social benefits. Even less good for the economy.
    New ruling to come in 21 Dec 2012. New national election in Spring 2015. Don’t know if it will do any good but have written to my local MP asking him to pass letter on the relevant minister.

  27. Eurosceptic of Liverpool 1st March 2011 at 2:31 pm

    Simple solution – replace the question
    ‘What is your gender?’ Box A ‘Male’ / Box B ‘Female’ with
    ‘How do you generally take a leak?’ Box A ‘Standing Up’ / Box B ‘Sitting Down’.

    Not foolproof, I’ll grant you, but just a thought.

  28. Michael Fallas 1st March 2011 at 2:47 pm

    I wonder how they will rate “transexuals” then ?

  29. I’ve always taken the pro-Europe line in arguements – mainly because the opposition is invariably the sort of Xenophobic Tory numbskull who gives homo sapiens a bad name – the sort who want us out of the EU so we can go back to trading with the ‘white’ commonwealth and apartheid-era South Africa.

    But I’m struggling with this one….

  30. Or maybe we are all being very short termist?

    The current protection market is so focused on price and picking the best risks that we are slowly moving towards prefferred lives and shrinking the overall market further and further.

    In the long run, when the pricing margins are removed through the usual competitive pressures, perhaps a bit more pooling of risks (not just on gender) will start to grow the market and clsoe the ‘protection gap’? Just a thought!

  31. This is a typical decision of a bunch of judges.

    In my experience most judges and lawyers lack the level of mathematical ability to be let loose on issues like this.

    A truly numerate judge or lawyer is a rare best indeed!

  32. acturies base events on the likelyhood of that event occurring this saveS some people from paying too high a premium if they fall into a low risk group – good is’nt.


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