Women's car insurance up by 300 tomorrow after new EU rules that ban setting prices according to gender come into force
Female driver pays 1,247 on average while a man pays 2,004Women aged between 31 and 35 also likely to be hit with a rise of 10%Men approaching retirement will also suffer as value of annuities will drop
00:40 GMT, 20 December 2012
Women drivers are among the biggest losers in an insurance revolution which comes into force tonight.
A change to European rules will ban insurers from setting their prices according to a person’s gender – which could cost women drivers around 300 a year more.
Currently, a young woman will get a much cheaper deal on her car insurance policy because she is seen as a much lower risk on the road than a man of the same age.
The biggest losers: Women are set to lose out on cheaper car insurance policies when European rules ban insurers from setting prices according to gender
A female driver between 17 and 25 pays an average of 1,247 for her car insurance, while a man in the same age group pays an average of 2,004.
But the European Court of Justice’s ruling, which follows a ten-year legal battle against the proposals by insurers, will put an end to women getting better deals on car insurance.
Premiums could jump by 24 per cent for young women – equivalent to around 300 a year – as a result of the rules, according to comparison website Confused.com.
And women aged between 31 and 35 are also likely to be hit, with a rise of around 10 per cent – 53 – a year.
The change applies to all insurance products so men approaching retirement will also suffer, because the value of annuities will drop.
Currently, men usually get a higher pension payout than women because they tend to die at a younger age.
Losing out: Women aged between 31 and 35 are also likely to be hit, with a rise of around 10 per cent
The Office for National Statistics said a woman will typically die aged 89, whereas the average age of death for a man is 85. Raj Mody, head of pensions at Pricewaterhouse Coopers, said men could see their annuities drop by up to 10,000 over the life of the policy.
Tom McPhail, head of pensions research at Hargreaves Lansdown, said it is vital that those buying an annuity tell the insurer everything, from whether they smoke to the state of their health.
He added: ‘The one group of people who are absolutely going to lose out from the new European rules are those with a big pension pot who cannot demonstrate any ill health.
‘The annuity that they will be offered will not be very attractive because the insurer thinks: “They are going to live until they are in their nineties’’.’
The Association of British Insurers said only new insurance policies and renewals will be affected by the rule change.