EU gender rules bring mixed blessings for women

| September 20, 2012
EU gender rules bring mixed blessings for women

New EU rules, due to take effect on 21 December, are expected to lead to a substantial increase in the cost of car insurance for female drivers, but could benefit female pensioners.

In 2011, the European Court of Justice in Luxembourg ruled that setting insurance premiums or pensions based on gender was discriminatory and breached EU rules on equality.

This means that insurers will no longer be able to use statistics showing that women have fewer accidents when they set car insurance premiums.

They will also be banned from taking into account the fact that women have a longer life expectancy than men when they set life insurance premiums.

Figures from price comparison site Gocompare.com show that, on average, men pay 41% more for than car insurance than women.

The current difference of around £315 between the cost of premiums for male and female drivers means that women face a big increase in their premiums when the EU ruling comes into effect, Gocompare.com said.

Scott Kelly, head of motor insurance at Gocompare.com, said: “From 21 December insurers will be prohibited from using gender in their pricing.

“But, as our survey shows, there has been no equalisation of rates to date, so the introduction of unisex rates is likely to have a sudden and dramatic impact as insurers seem to be holding off until the last minute.”

Although they are likely to lose out when it comes to motor insurance, the EU decisions means that women will be able to withdraw a greater amount from their pension in retirement each year.

As men tend to have a lower life expectancy than women, men are generally allowed to withdraw more from their pension annually than women.

The new gender ruling means that women could receive around 8 per cent more money from their pension each year.

Bright Grey and Scottish Provident are waiting until the deadline before they switch to gender neutral rates but LV= has revealed that it will introduce the new rates three weeks early, on 1 December.

Other insurers have not yet revealed their plans.

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