Monday 12th November 2007
Pensions arranged through Legal & General could be subject to a postcode lottery in light of new rules from the financial services provider.
Under the terms of a new scheme from the pensions provider, the level of annuity paid out is to be based on the postcode area the accountholder lives in.
Annuities pay out an annual sum throughout retirement, with Legal & General offering a standard rate in the past.
But now residents in postcodes with a shorter average life expectancy are to receive a higher rate.
A spokesperson for the firm adds that the step is the first in a series of moves aimed at increasing levels of "sophistication" in the pensions market.
Simon Gadd, managing director of Legal & Generals annuities business, comments: "Using other indicators rather than just age and gender to assess life expectancy is a natural evolution for the individual pension annuity market.
"We view postcode rating as just the start and we will be exploring other methods of more accurately assessing life expectancy in the future."
The new method of quoting for a non-profit annuity came into force on Wednesday, November 7th.
Legal & General asserts that all customers continue to receive the standard rate, with those at greater risk being given an increased income accordingly.
Meanwhile, new research from the financial services provider reveals that employees in management positions could be in the best health in the run-up to retirement.
The firm found that senior managers are less likely to be overweight than their non-managerial counterparts, as well as claiming to have enough spare time to exercise adequately.
©
Everything on preparing your finances for your children's futures. From Child Trust Funds through to tax planning. Request your FREE brochures here.
