L&G think a postcode is an indicator of how long someone will live
Those who are "poorer", according to their postcode, are not expected to live as
long - and so they will get a larger income in retirement, under a new scheme
introduced by Legal and General.
L&G Annuities launched their postcode rated annuities this week, after a pilot scheme proved successful.
We asked for your comments - a selection of which are below - this debate is now closed.
If someone is considered to be at higher risk, and hence would incur extra premiums for life assurance, it is only fair that they should receive a higher income when purchasing an annuity. However, using postcodes is far too crude an approach to be of any use. Traditional factors like health, weight and lifestyle should be much better guides. To make their idea effective, the Legal & General will need to invest much more in their underwriting department.
Chris Grey, Guildford
I wonder how much of the postcode they use? Is it the first half of the post code (e.g. G11 - a few thousand houses) or the whole of the G postcode? Glasgow has some of the richest and also most deprived areas of Scotland - its average life expectancy is pulled down by the poorer areas. However those in the richer areas can expect a full lifetime.
C Miller, Glasgow
Do they really expect us to believe they are doing this for our benefit? All our lives we are told to exercise, eat healthily, not to smoke or drink to excess, only to find out those that ignore that advice get paid a higher pension!
I wonder if the differences are in fact that significant. More to the point, have L&G actually released a list of postcodes that may affect your annuities or is it a closely guarded secret?
This is all wrong. Surely the whole concept of insurance and pensions is to spread risk. Differentiating between people based on lifestyle or other attributes attacks the fundamental concept of shared risk.
Rich Bell, Leeds
At what point in one's life is the postcode taken as the determining factor? Given that many people move during their career and again when they retire, there could be different postcodes which affect the possible pension. Which of them will be counted or will a proportionate impact be taken into consideration?
J Longstaff, London
We are now only one step away from genetic pensions. Might not be a bad thing when you consider that you may not get back what you put in.
Charles Dowie, Epworth
Can someone tell me what happens if, during your receipt of a pension by this method, you move house to a "poorer" or "richer" postcode? Does your pension change? You could arrange your pension with an address in a "poorer" area and then move, or move back, to a "richer" area.
A P Fincher, Soudley, Forest of Dean
I very much object to this, as a non-smoker, non-obese middle-age male who tries very hard to keep himself reasonably fit and active, I am already paying a premium on my taxes to support medical care and state benefits for these very same people. If the pension companies feel that the pot of money left when people die prematurely should not be used to benefit other pension customers, then perhaps they should give it to the NHS as a form of payback for the care and attention these people have been given.
Mark Pickin, Doncaster
If this trend towards "lifestyle" annuities continues, it will pay people to put on weight before retirement, and tell their doctors they smoke, never exercise and so on, all to establish their credentials for low life expectancy and hence a higher annuity.
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