Female Drawdown rates to be brought in line with Male rates

HM Revenue & Customs have instructed pension providers to provide women with the same, higher, maximum drawdown rate as men from 21 December 2012.  The announcement means providers will need to use male GAD (Government Actuary Department) rates to calculate the maximum pension a woman in drawdown can take each year.  This follows a ruling by the European Court of Justice in March last year banning the use of gender as a risk factor when offering insurance products.  The ruling, based on a challenge by Belgian consumer group Test-Achats, followed advocate general Juliane Kokott’s view that using gender as a risk factor when pricing insurance is discriminatory.  HMRC’s statement read: “Until it becomes clearer how annuity providers will apply the judgement inpractice, the maximum drawdown pension for both men and women aged 23 and over should becalculated using the higher male rates from 21 December 2012.”   The change being announced means that from 21 December 2012 women will be able to take a higher drawdown pension income than before.   Men will see no change in the maximum drawdown pension they can receive. If a female SSAS member is thinking of drawing retirement benefits from their scheme it may be worth their while delaying this until 21 December 2012 as the maximum income allowable will most likely behigher from then.  Any female clients already drawing a pension via ‘Drawdown Pension’ will move onto the new rates at their next review date following 21 December 2012.  It is also possible to review income payments annually on the anniversary of drawdown with the member’s written request.