Sep 12 2007
A person's postcode should not be the only factor used to determine the level of their annuity rates, it has been claimed.
Financial services firm Just Retirement insists that while postcodes should be taken into account when annuity policies are being formulated, there are many other factors that need to be considered.
The company suggests that to set annuity rates based solely on where a person lives is "too crude" a method to be considered fair and appropriate.
"Using this factor alone to assess mortality is analogous to using only postcodes to assess motor insurance premiums, without taking into account whether the customer was driving a Ferrari or a Mini," said Peter Ellis, head of annuities at Just Retirement.
"To put this in perspective, our own assessment process can take into account up to 1,500 medical conditions in addition to a customer's postcode when determining annuity rates."
A study by the Alliance Trust recently suggested that more than one in four British consumers are currently making no financial provisions for when they reach retirement.
