New EU law rips us all off
EURO judges were accused of "utter madness" last night after imposing new gender equality rules on pensions and insurance leaving millions of Britons out of pocket.
Experts predict that car insurance premiums for women will rocket by up to 25 per cent after the legal ruling banned sex discrimination in financial transactions.
And men can expect significantly lower pension payments because providers will no longer be able to take into account the fact they tend not to live as long as women. The latest meddlesome ruling by the Luxembourg-based European Court of Justice triggered fresh outrage yesterday.
And it is certain to add to the momentum behind the Daily Express’s crusade for the UK to withdraw from the European Union.
Car insurance premiums for women will rocket
The Daily Express last month delivered to Downing Street a 373,000-strong petition from readers backing the newspaper’s stance.
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Tory Euro-MP Sajjad Karim said: “This ruling is utter madness. It is a setback for common sense.
“Unelected judges have overruled the will of democratically elected MEPs and governments. Is it any wonder that people are so disenchanted with the EU?” Pension expert Dr Ros Altmann, director general of over-50s specialist Saga, said: “The European Court has dealt a further future blow to Britain’s already struggling pensioners.
“Annuities will become more expensive as four-fifths of annuities are bought by men. This means that future UK pensioners will be even poorer.
“Women’s annuity rates are unlikely to improve by much.”
Stephen Booth, of the Euro-sceptic think-tank Open Europe, said: “This ruling has pushed anti-discrimination legislation beyond the realms of all common sense.
“Unaccountable EU judges have ruled to overturn long-held national rules and increased costs for consumers in the process. To do so in the name of equality just adds insult to injury.”
The European Court’s judgment said: “Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination.”
The judges based the ruling on their interpretation of the Lisbon Treaty, which imposed a raft of new rules on the UK despite being introduced without a referendum.
It means that charging different fees or offering benefits on the basis of gender will be outlawed from December 21, 2012.
Insurance firms will be unable to take into account the fact that young women drivers are less likely to be involved in an accident than men and so should be cheaper to insure.
Open Europe calculates that providers will have to raise an extra £936million to cover the “new uncertainties”, with insurers who cater for women drivers, such as Sheilas’ Wheels, set to be particularly affected.
Simon Douglas, director of AA Insurance, said: “Young women have, until now, paid car insurance premiums that are typically up to 50 per cent cheaper than men.
“In the short term, they will see their premiums rise significantly, while those for young men are likely to fall a little.”
John Miles, of price comparison website Gocompare.com, said: “Few drivers will welcome this ruling. It won’t make insurance fairer, it will make it more expensive in many cases.”
The ruling will also ban pension providers from recognising that men have shorter average life spans than women. Only pensions in Britain are affected because of UK mandatory rules on purchasing annuities.
Men approaching retirement could see an eight per cent cut in their pension rates while women might see a six per cent rise, estimated the Association of British Insurers. And for life insurance, men could see a 10 per cent fall in costs, while women’s rates could rise by 20 per cent.
Darren Philp, director of policy at the National Association of Pension Funds, said the decision would lead to “a worsening of people’s pension incomes”.
Home Secretary Theresa May, who is also the Equalities Minister, said: “I’m very disappointed by this ruling, which goes against the grain of the common sense approach to equality being pioneered by the UK Government.
“Nobody should be treated unfairly because of their gender but financial services providers should be allowed to make sensible decisions based on well-defined risk factors.
“However, we need to abide by the European Court of Justice’s ruling, so the Government is working closely with the insurance industry to minimise the negative impacts of the decision.”
